A buyer asks you to pay $10,000 toward their closing costs. Three things to know first: the money never leaves your hand as a cheque, the house still has to appraise for the full contract price, and the difference between this and cutting your price by $10,000 is smaller than you think, though not zero.
This works through the seller’s side of that decision, with the arithmetic. For the full picture of what you pay at settlement, see closing costs in Richmond for buyers and sellers in 2026 and a real breakdown of Richmond closing costs.
A concession is a credit at settlement, not a cheque
Nothing transfers before closing and nothing goes to the buyer personally. The settlement agent applies the agreed amount against the buyer’s side of the settlement statement, reducing the cash they wire in, and it appears as a line item on the buyer’s Closing Disclosure, the form the Consumer Financial Protection Bureau describes in its guide to the Closing Disclosure. The CFPB also lists which fees are paid at closing and who pays them, including seller credits.
One consequence sellers miss: a concession only applies against costs that exist. Agree $10,000 against buyer closing costs and prepaids of $8,400 and only $8,400 is credited. The remaining $1,600 is not refunded in cash and cannot go to the down payment, so it stays with you.
The house still has to appraise for the full contract price
The common manoeuvre is to raise the price to absorb the credit: the buyer would have offered $450,000, so they offer $460,000 and ask for $10,000 back. On paper you are whole. In practice the appraiser now has to support $460,000.
If it lands at $450,000, the concession is not what breaks. The price is. The loan is sized against the lower of price and appraised value, the buyer is short, and you are renegotiating in week three. See what happens if a home appraises below the offer price in Richmond and the clause buyers use to absorb it, appraisal gap coverage in a Richmond offer.
The test: would this house appraise at the higher number on its own merits? If not, you have bought a delay, not protection.
What the lender will allow
Seller credits are capped, and the cap is set by the buyer’s loan, not your listing agreement. For conventional loans sold to Fannie Mae, the published limits on what it calls interested party contributions are these, from the Selling Guide topic on interested party contributions (version dated 7 May 2025).
| Occupancy | Loan-to-value ratio | Maximum financing concession |
|---|---|---|
| Principal residence or second home | Greater than 90% | 3% |
| Principal residence or second home | 75.01% to 90% | 6% |
| Principal residence or second home | 75% or less | 9% |
| Investment property | All ratios | 2% |
Three details matter more than the percentages. The cap is calculated on the lower of sales price or appraised value, not the loan amount. The credit must be equal to or less than the buyer’s actual closing costs, and anything above that is reclassified as a sales concession and deducted from the sales price. And contributions cannot go toward the down payment or reserves at all.
Those figures are conventional only. FHA, VA and USDA set their own limits, and they are not the same numbers. [DATA NEEDED: maximum seller contribution limits for FHA, VA and USDA loans, from HUD, VA and USDA primary sources] Ask the buyer’s lender to confirm the applicable cap in writing before you sign.
Richmond market context, July 2026
- Richmond Metro, single family: median sold price $460,000 (up 2.2% year over year), 19 average days on market (down 13.6%), 1.8 months of supply (down 5.3%), 1,049 closed sales (up 0.5%)
- Chesterfield County, single family, county-level figures: median $440,000 (down 3.3%), 21 days on market (down 8.7%), 1.8 months of supply (down 10.0%), 407 closed sales (down 8.3%)
- Henrico County, single family, county-level figures: median $475,000 (up 11.8%), 16 days on market (down 11.1%), 1.5 months of supply (down 11.8%), 287 closed sales (down 2.0%)
- [DATA NEEDED: median price per square foot, July 2026, by area]
Month covered: July 2026, the latest published. Source: Central Virginia Regional MLS, July 2026, via the Richmond Association of REALTORS Sortable Statistics.
The $460,000 metro median is not an accident of this example. It puts the arithmetic below in the middle of the market.
What it actually costs you: $460,000 with a $10,000 concession, or $450,000 with none
Take a Midlothian resale and run both. Only the structure changes.
Version A
Price $460,000
Concession $10,000
Net of credit $450,000
Version B
Price $450,000
Concession none
Net of credit $450,000
At the level most sellers stop at, these are identical: $460,000 minus $10,000 is $450,000. That is where most of the answer lies, and worth saying plainly, because sellers routinely refuse a concession they would accept as a price cut of the same size.
The differences sit in the costs calculated on the contract price, because those run on $460,000 in Version A.
Virginia grantor’s tax. Under Code of Virginia section 58.1-802, a tax is imposed on the deed at 50 cents for each $500, or fraction of $500, of the consideration or value, whichever is greater, payable by the grantor unless the parties agree otherwise. On $460,000 that is 920 increments, so $460. On $450,000, 900 increments, so $450. Version A costs $10 more.
Brokerage fee. Whatever percentage your listing agreement states applies to the contract price. Purely as an illustration, at 5 percent that is $23,000 on $460,000 against $22,500 on $450,000, a difference of $500. Use your own agreement’s number, and see what a Realtor costs when selling in Richmond.
| Seller’s side | Version A: $460,000 with $10,000 credit | Version B: $450,000, no credit |
|---|---|---|
| Contract price | $460,000 | $450,000 |
| Concession to buyer | minus $10,000 | none |
| Brokerage fee, illustrative 5% | minus $23,000 | minus $22,500 |
| Grantor’s tax, section 58.1-802 | minus $460 | minus $450 |
| Net before other settlement costs | $426,540 | $427,050 |
Version B nets $510 more: $500 of brokerage fee and $10 of grantor’s tax. Your payoff, prorated taxes and deed preparation do not move with price. A $10,000 concession and a $10,000 price cut therefore cost a Richmond seller almost the same, the concession marginally more.
That is half the picture. The two versions are not the same for the buyer at all.
| Buyer’s side, 10% down, $14,000 of closing costs and prepaids | Version A | Version B |
|---|---|---|
| Down payment | $46,000 | $45,000 |
| Loan amount | $414,000 | $405,000 |
| Closing costs and prepaids | $14,000 | $14,000 |
| Seller credit applied | minus $10,000 | none |
| Cash the buyer must bring | $50,000 | $59,000 |
The buyer brings $9,000 less cash and borrows $9,000 more. That is the entire point of the instrument: for roughly $510 you hand a buyer a $9,000 improvement in the constraint that most often stops a sale closing. At 90 percent loan-to-value the Fannie Mae cap is 6 percent, or $27,600 on $460,000, so a $10,000 credit sits well inside it.
Find out what your house is actually worth first
Every number above starts from a price. Before you decide whether to give a credit, raise the price to cover one, or hold firm, you need a defensible view of what your house will appraise and sell for. Our free home valuation is a real analysis against the recent closings on your street, not an automated estimate.
Request your free home valuation, and see what is selling near you on our recently sold properties.
When to give the credit and when to cut the price
The rule turns on which constraint binds your buyer. Ask their agent directly.
Give the credit when the buyer is cash-constrained. They qualify on income and the payment is not the problem, but they do not have another $9,000 liquid. A price cut of the same size barely helps, because ten percent of $10,000 is $1,000 off the down payment and nothing off closing costs. That is the common shape of a first-time buyer in Lakeside or a starter house in Chesterfield County.
Cut the price when the constraint is value or payment. If the property will not support the higher number, or the buyer’s real problem is the monthly payment, a lower price is the honest fix and it removes the appraisal risk.
Watch the comparable sales record. A concession leaves a $460,000 closing in the record where a price cut leaves $450,000. Appraisers analyse concessions on comparables anyway, so treat that benefit as marginal rather than as a reason to pick the structure.
New construction is a different negotiation. Builders in Short Pump favour credits and rate buydowns over price cuts precisely because the recorded price protects the rest of the section they are still selling. Know what you are competing with.
Our seller representation page explains how we price and position. The other money terms that move cash at a Richmond settlement table are appraisal gap coverage and escrow holdbacks.
Frequently asked questions
Do I have to pay the concession in cash at settlement?
No. The settlement agent deducts it from your proceeds, so it reduces the wire you receive rather than requiring one from you. You would only bring funds if your proceeds failed to cover your payoff and costs, which a large credit can contribute to.
Can a concession be used to buy down the buyer’s interest rate?
Yes, and for a payment-constrained buyer it often does more good than the same money against closing costs. Where the buydown is funded by an interested party, its cost counts against the same contribution cap, so it is not extra room.
Is a seller concession tax deductible for me?
Not a deduction in the ordinary sense. A credit generally reduces the amount realised on the sale, which matters if you have a gain above the exclusion. [DATA NEEDED: treatment of seller concessions in calculating amount realised, from IRS primary guidance] Ask your tax preparer, not your agent.
What if the buyer’s closing costs come in lower than the credit we agreed?
The unused portion is generally not paid to the buyer and cannot move to their down payment under conventional guidelines, so it stays with you. Agree the credit against a real Loan Estimate rather than a round number.
Does a concession have to be in the original offer?
No. Credits are often added later by addendum, most commonly in place of repairs after the inspection. We cover that version in how to negotiate repairs after a Richmond home inspection.
Will offering concessions up front attract more buyers?
Advertising a credit widens your pool among buyers who qualify but are short on cash. At 19 average days on market across the Richmond metro in July 2026, it is better held in reserve as a negotiating tool than published on day one.
Start with the number everything else depends on
A concession is a decision about your net, and you cannot make it without a defensible price. Our free home valuation gives you the range an appraiser is likely to support, so you can tell a credit that costs you $510 from a price increase that will not survive the appraisal.
Request your free home valuation, or send us the address and we will run the comparable sales on your street.
This is general information about how seller credits work in Richmond transactions, not legal or tax advice. Lender contribution limits and contract language vary, and a Virginia real estate attorney should review the terms of any credit before you agree to them.
