What is a seller concession
and when does one make sense?

A seller concession is a credit the seller gives the buyer at closing. It usually goes toward the buyer's closing costs, or toward buying the interest rate down. The contract price does not change, which is the part that confuses people: the house still sells for the number on the contract, and the credit is applied at the table. Buyers meet the term when they can afford the house but are short on the cash it takes to get to closing day.

Say a home is on the market around $400,000 and a buyer has enough for the down payment but not much left for closing costs. Instead of asking the seller to drop the price, the offer comes in at the asking number with a credit toward those costs written into it. The seller nets less than the headline figure, the buyer needs less cash on the day, and the deal happens at a price the seller can live with. That trade is why concessions get used at all.

Those numbers are an illustration and not an offer or a quote. There is also a real limit on this: loan programs cap how large a concession can be as a share of the price, and that cap is not the same across programs. It is worth knowing the number before a credit gets written into an offer, and your lender is the one who confirms it for your loan.

What to ask, and who answers it: your lender is the one who confirms what your program allows, and how a credit toward costs compares with putting the same money into the rate. Your agent can tell you how a concession is likely to be received by a particular seller and how to structure it in the offer.