Want to lower your cash to close or make your monthly payment more manageable on an Atlanta home? In 2025, seller concessions are back in a big way across metro Atlanta, and they can be the tool that gets you to the finish line. Whether you are buying or selling, understanding what concessions can cover, how much is allowed, and how to structure them can save time and money. This guide breaks it down in plain English so you can use concessions confidently in today’s Atlanta market. Let’s dive in.
Why concessions are common in Atlanta now
More listings and still-elevated rates have shifted leverage toward buyers across much of metro Atlanta. In early 2025, roughly six in ten local home sales included a seller concession, which is well above typical pre‑pandemic levels. Local market briefs also show inventory growth and flatter price trends through late 2024, conditions that often push sellers to offer credits to keep deals moving. For a quick pulse on inventory and pricing, review the latest Atlanta REALTORS Market Briefs for context on how competitive your price point is across the city and North Fulton suburbs. (Atlanta REALTORS Market Briefs)
What a seller concession can pay for
Seller concessions are funds the seller agrees to contribute at closing for eligible buyer costs. Common uses include:
- Closing costs such as lender origination, title fees, and prepaids like taxes and insurance.
- Mortgage rate buydowns, including temporary 2-1 buydowns or permanent discount points.
- Agreed repair credits after inspection, when allowed by the loan program.
- Certain prepaid items like HOA dues, when coded properly on the closing statement.
Loan programs have rules about what qualifies and how much is allowed, so the plan should match the buyer’s financing.
How much you can use by loan type
Lenders cap how large concessions can be based on the loan program and down payment. Always confirm details with the buyer’s lender before finalizing terms.
- Conventional (Fannie Mae/Freddie Mac):
- Down payment under 10%: up to 3% of the price or appraised value.
- Down payment 10% to 24.99%: up to 6%.
- Down payment 25% or more: up to 9%.
- Investment properties: typically up to 2%.
(See Fannie Mae’s Interested Party Contributions.) (Fannie Mae IPC guide)
- FHA: Generally up to 6% toward eligible fees, prepaids, and points, but not toward your minimum down payment. Excess credits can be treated as an “inducement to purchase,” reducing the price used for LTV. (HUD 4000.1)
- VA: Many normal closing costs are not capped, but items considered “seller’s concessions” are limited to 4% of the appraised value. Classification matters, so the lender must code costs correctly. (VA closing costs and concessions)
- USDA: In practice, lender guidance often allows up to 6% toward eligible costs. Confirm specifics with the lender for your loan.
Example: On a $400,000 purchase, a 3% conventional cap means up to $12,000 in credits with less than 10% down. On FHA, 6% could allow up to $24,000 if your actual eligible costs are that high. The usable amount can never exceed your real closing costs and program rules.
Credits vs. price cuts: what helps more
Both strategies can work. The better choice depends on your immediate need and your financing.
- If you need help with upfront cash: A credit toward closing costs can reduce your cash to close and keep your savings intact.
- If you want a permanently lower payment: A price reduction lowers your loan amount and monthly payment for the life of the loan.
- Why sellers often prefer credits: Credits can preserve the headline sale price, which may support neighborhood comparables and net proceeds targets.
If you are buying
- Ask for credits that solve your problem. If cash is tight, prioritize closing cost credits. If the monthly payment is high, consider a buydown. Ensure you can afford the payment when any temporary buydown ends.
- Match your ask to your loan. Keep within the program cap and only for eligible items. Your lender should confirm what counts toward the cap in writing. (Fannie Mae IPC guide)
- Keep the appraisal in mind. If you raise price to “wrap in” a credit, the home still must appraise. Build a backup plan in case the appraisal comes in low.
If you are selling
- Compare net proceeds with a credit vs. a price cut. Include commission, transfer tax, and any scheduled repairs. A Georgia-focused calculator can help you stress test scenarios. (Georgia seller cost calculator)
- Coordinate early with the buyer’s lender. Confirm caps and eligible uses so nothing falls apart at the closing table. (Fannie Mae IPC guide)
- Consider tax treatment. Seller-paid credits and points are typically selling expenses that reduce your amount realized, which can reduce taxable gain. Always consult your tax advisor. (IRS Publication 523)
Georgia closing costs and taxes to factor in
Closing customs vary by county and contract, but these basics apply across Atlanta and Fulton County:
- Georgia real estate transfer tax is typically $1 per $1,000 of consideration. The seller is generally liable by statute, though parties can negotiate. Recording and intangible taxes apply to the deed and security instrument. Check the county clerk for current recording fees. (Georgia Department of Revenue)
- Typical buyer closing costs in Georgia run about 2% to 5% of the purchase price, depending on loan type, points, and escrows. Sellers often pay 1% to 3% excluding commission. Use your lender’s estimate for precise numbers. (Georgia closing cost ranges)
Tip: Some buyers may be able to deduct certain seller-paid points if they meet IRS rules. Ask your CPA for guidance. (IRS Publication 530)
Appraisal and underwriting pitfalls to avoid
A well-structured concession should be clean and compliant. Watch for these common tripwires:
- Over-cap contributions. If credits exceed your loan program limits, the lender may reduce the price used for LTV or deny the overage. HUD labels excess credits an “inducement to purchase.” (Federal Register notice)
- Mis-categorized costs. Some items count toward the cap while others do not. Code them correctly on the closing statement and get lender sign-off. (Fannie Mae IPC guide)
- Appraisal shortfalls. If you lift price to fund a credit and the appraisal comes in low, you may need extra cash or a renegotiation.
A simple plan to use concessions in Atlanta
- Confirm the loan program and maximum allowable credit with the lender.
- Decide what the credit should fund: closing costs, points, repairs, or a defined buydown.
- Set a clear dollar cap in the contract and specify permitted uses.
- Keep a running estimate of actual eligible costs to avoid unused credit.
- Verify the final Closing Disclosure shows each item correctly and within program rules. (HUD 4000.1)
Talk with a local advisor
Concessions are powerful in today’s Atlanta market when they are structured right. If you want a tailored plan that fits your loan, neighborhood, and timing, connect with a local advisor who understands both negotiation and the construction considerations that can influence appraisal and repair credits. If you are weighing credits versus a price adjustment on your listing, or you want to target a buydown on your next purchase, reach out to Casey Schiltz for a clear, numbers-first strategy and hands-on guidance.
FAQs
What are seller concessions in Atlanta real estate?
- Seller concessions are funds the seller pays at closing to cover eligible buyer costs like lender fees, prepaids, and sometimes rate buydowns, subject to loan program limits and lender approval.
How much can a seller pay toward my closing costs with a conventional loan?
- For primary homes, caps are typically 3% with less than 10% down, 6% with 10% to 24.99% down, and 9% with 25% or more down; investment properties usually cap at 2%. Always confirm with your lender. (Fannie Mae IPC guide)
Can seller concessions cover a mortgage rate buydown in Atlanta?
- Yes, many programs allow credits to fund temporary or permanent buydowns if structured within program rules and caps. Your lender will confirm eligibility and how the buydown must be documented. (HUD 4000.1)
Who pays Georgia’s real estate transfer tax at closing?
- By statute the seller is typically liable for the transfer tax, although the contract can allocate costs differently. Confirm specifics with your agent and closing attorney. (Georgia Department of Revenue)
Are seller concessions taxable for buyers or sellers?
- For sellers, concessions are usually selling expenses that reduce the amount realized on the sale. Buyers may be able to deduct certain seller-paid points if IRS rules are met. Always consult a tax professional. (IRS Publication 523, IRS Publication 530)
