You’re buying a house.
You’ve saved money for the down payment.
You’ve paid for inspections.
You’ve got earnest money going out.
And then your lender starts talking about closing costs and suddenly you’re thinking:
“Excuse me. There are MORE costs?”
😂
Yes.
Buying a house has a remarkable ability to introduce you to expenses you didn’t know existed.
But here’s the good news:
Yes, you can ask a seller to pay some of your closing costs in Georgia.
Whether the seller agrees—and how much they’re allowed to contribute—is a different conversation.
So let’s talk about how it actually works.
First, What Are Closing Costs?
Your down payment and your closing costs are not the same thing.
Closing costs can include things such as:
- Lender fees
- Appraisal fees
- Title-related expenses
- Attorney/settlement expenses
- Recording fees
- Prepaid property taxes
- Homeowners insurance
- Prepaid interest
- Discount points
Exactly what you’ll pay depends on your loan, lender, property and transaction.
That’s why I don’t love giving buyers one magical percentage and saying:
“This is exactly what closing will cost.”
Your lender should give you an estimate based on your actual loan.
So What Does It Mean When the Seller “Pays Closing Costs”?
Let’s say you’re buying a house for $350,000.
Your lender estimates you’ll need $10,000 for allowable closing costs and prepaid expenses.
Instead of you bringing that entire $10,000 in addition to your other required funds, we might negotiate for the seller to contribute some or all of it at closing.
For example, your offer might essentially say:
Purchase price: $350,000
Seller contribution toward buyer’s closing costs: up to $7,500
That does not mean the seller writes you a $7,500 check after closing so you can go buy furniture.
😂
The credit is handled through the transaction and applied toward eligible costs according to the contract and your loan requirements.
Why Would a Seller Agree to That?
Because everything in an offer is part of a negotiation.
A seller isn’t only looking at the purchase price.
They’re looking at the whole offer.
Price.
Financing.
Closing date.
Due diligence.
Contingencies.
Seller-paid costs.
And ultimately:
How much money are they actually going to walk away with?
Imagine two offers.
Offer A
$350,000 purchase price
No seller-paid closing costs
Offer B
$355,000 purchase price
Buyer asks seller to contribute $5,000 toward closing costs
Those offers may look different at first glance, but from the seller’s perspective, their financial outcome could be much closer than the purchase prices make it appear.
Obviously that’s simplified—there are other expenses and appraisal considerations involved—but it shows why we evaluate the whole offer instead of obsessing over one number.
Why Would a Buyer Ask for Closing Costs Instead of Offering Less?
This is where seller contributions can be especially useful.
Suppose you have enough income to comfortably afford the house.
You qualify for the mortgage.
You have your required down payment.
But after the down payment, inspections, moving expenses and everything else involved with buying a house…
your available cash is getting uncomfortable.
You could potentially offer $5,000 less for the house.
But that doesn’t necessarily put $5,000 back in your pocket on closing day.
A negotiated seller contribution toward allowable closing costs can directly reduce the amount of cash you need for those costs.
For some buyers, cash at closing matters more than a slightly smaller mortgage balance.
That’s a conversation I want the buyer, lender and Realtor having before we write the offer.
Can You Ask for Seller-Paid Closing Costs With an FHA Loan?
Yes.
FHA financing generally permits interested parties—including sellers—to contribute up to 6% of the sales price toward allowable buyer closing costs, prepaid items, discount points and certain other financing costs. HUD
But here’s where I want buyers to be careful:
“FHA allows up to 6%” does NOT mean you automatically ask every seller for 6%.
😂
The amount needs to make sense for:
- Your actual closing costs
- Your loan
- The house
- The offer
- The competition
- The seller’s position
If you only have $8,000 of eligible costs, we’re not asking for $20,000 just because we found a percentage on Google.
Your lender needs to tell us what can actually be used.
What About a Conventional Loan?
Seller contribution limits on conventional loans depend on several factors, including occupancy and loan-to-value.
For Fannie Mae loans on a principal residence or second home, current maximum financing concessions generally range from 3% to 9%, depending on the loan-to-value ratio. Investment properties have a lower limit. Fannie Mae Selling Guide
Again:
Your lender determines what your specific loan permits.
Rachel with a calculator is not replacing underwriting.
😂
What About VA Loans?
VA loans allow sellers to pay certain buyer closing costs, and VA also has rules governing seller concessions.
One detail that gets oversimplified online is the famous 4% VA seller-concession rule.
That 4% limit applies to certain concessions; it does not mean every seller-paid closing cost is automatically included in that 4% calculation. VA specifically notes that some normal closing costs and discount points are treated differently. Benefits
Translation:
Don’t try to memorize this from TikTok.
Let the lender calculate it.
😂
Can the Seller Pay Your Down Payment Too?
Generally, seller closing-cost contributions aren’t simply a substitute for the buyer’s required down payment.
For example, Fannie Mae specifically says interested-party contributions can’t be used to satisfy the borrower’s down payment, reserve requirements or minimum borrower contribution requirements. Fannie Mae Selling Guide
There may be separate down-payment assistance programs, gift-fund rules and other financing options available depending on the buyer.
But those are different conversations.
What If It’s a Competitive House?
Now we get to the part where strategy matters more than what’s technically allowed.
Suppose a house hits the market Friday.
It’s priced well.
It’s beautiful.
There are 14 showings scheduled.
And three other buyers are writing offers.
Can you ask the seller for $10,000 toward closing costs?
Sure.
You can ask.
But your offer now has to compete against buyers who may not be asking the seller for that money.
That’s why I don’t believe in automatically inserting closing-cost requests into every offer.
We need to know:
How competitive is this property?
How long has it been listed?
Have there been price reductions?
Does the seller appear motivated?
Are there other offers?
What does the buyer actually need?
The answer changes from house to house.
What If the House Has Been Sitting for a While?
Now I’m much more interested in the conversation.
A house that’s been sitting on the market for 45, 60 or 90 days may present a very different negotiating opportunity than one listed yesterday.
That doesn’t automatically mean the seller is desperate.
But it gives us information.
Maybe they’ve already reduced the price.
Maybe they’re carrying two mortgages.
Maybe they’ve relocated.
Maybe they simply want to get the house sold.
That’s when we start looking at whether asking for seller-paid closing costs could create a deal that works for both sides.
And sometimes a seller would rather contribute toward a buyer’s closing costs than make another straight price reduction.
Not always.
But it’s worth evaluating.
Seller Credits Can Sometimes Be Used Strategically
Closing-cost contributions aren’t necessarily limited to simply covering basic fees.
Depending on the loan program and lender requirements, seller contributions may also be used toward things such as discount points or an interest-rate buydown.
Fannie Mae recognizes interest-rate buydowns as a form of financing concession, and VA permits seller-funded temporary buydowns subject to its rules. Fannie Mae Selling Guide
And this is where buyers sometimes need to compare options instead of automatically saying:
“I want the lowest possible price.”
Would $10,000 off the purchase price help you more?
Or could using that same negotiating power toward allowable closing costs or financing potentially have a bigger impact on your immediate cash needs or monthly payment?
That’s a lender + Realtor + buyer conversation.
Because those numbers can look very different once somebody actually runs them.
The House Still Has to Appraise
Here’s another piece buyers sometimes forget.
You can’t simply inflate the purchase price by $20,000 so the seller can hand $20,000 back toward your expenses and assume everything will be fine.
The financing still has to work.
The property still has to support the value.
And concessions are disclosed in the transaction and considered in the appraisal process. Fannie Mae requires financial assistance and concessions to be reported in the appraisal. Fannie Mae Selling Guide
So:
“We’ll just raise the price and have the seller pay everything”
is not an unlimited money glitch.
😂
Don’t Wait Until You’re Writing the Offer to Figure This Out
This is probably the biggest thing I want buyers to take from this article.
Talk to your lender before we find the house.
I want to know:
How much cash are you comfortable bringing to closing?
What does your loan allow?
What are your estimated closing costs?
Would seller contributions materially help you?
Are there other financing strategies we should consider?
Because when we find the house you love at 7:42 on a Saturday night and offers are due Sunday…
that is not when I want everybody meeting each other for the first time.
😂
We should already know our options.
And Sellers—Don’t Automatically Reject the Request
Seller side for a second.
If an offer comes in asking you to contribute toward the buyer’s closing costs, don’t immediately think:
“Absolutely not. I’m not paying THEIR bills.”
Look at the net.
What are they offering?
What are they asking for?
How strong is their financing?
What other terms are included?
How does the offer compare with your alternatives?
Sometimes the offer with a seller contribution is still the strongest offer.
Sometimes it isn’t.
That’s why we do the math.
A Front Porch Rachel Thought
Buying a house isn’t just about whether you can afford the payment.
There’s also the very real question of:
How much cash do I need to get from where I am today to sitting on the floor of my new living room eating pizza out of a box?
😂
Down payment.
Closing costs.
Inspections.
Moving.
Utility deposits.
The inevitable Target trip where you somehow spend $347 because apparently your new house requires twelve things you never needed before.
It adds up.
Seller-paid closing costs can be a useful negotiating tool.
But they’re not automatic.
They’re not unlimited.
And they’re definitely not something I’d decide based on a random percentage somebody found online.
We look at the buyer.
We talk to the lender.
We look at the house.
We look at the seller’s position.
We look at the market.
Then we build the offer.
Because the goal isn’t just to write an offer.
It’s to write one that gives you the best chance of getting the house and still makes financial sense when you get to the closing table.
Real Estate. Real Life. Rachel.
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