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When it comes to real estate transactions, the topic of closing costs is one of the most frequently misunderstood aspects of the process. Many buyers and sellers alike wonder: Can the seller pay closing costs? The answer is yes—but with some important nuances. In this blog, a seasoned real estate attorney in New York explains how seller-paid closing costs work, what’s allowed under different loan types, and what to know before making or accepting such a request.
AUTHOR YURIY MOSHES, ESQ
Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation
and real estate transactions as his areas of expertise
Yes, buyers can absolutely ask the seller to contribute toward their closing costs. In fact, this is a common negotiating tactic, especially in buyer’s markets or when properties have been sitting on the market for an extended period. While sellers are not obligated to agree, many do as an incentive to close the deal quickly.
However, there are legal and strategic considerations that go into negotiating seller concessions. That’s why it’s critical to consult with a real estate attorney before submitting an offer. Understanding how to properly structure these requests—especially when navigating 7 key closing issues—can help protect your interests throughout the process.
Sellers can legally cover various closing costs, depending on the agreement between the parties. These may include:
It’s important to understand that what closing costs the seller can pay often depends on the loan type involved, as well as state or local rules. In New York, sellers typically pay higher fees than in many other states, so concessions must be weighed carefully. To understand your specific situation, check out this Seller Closing Cost Calculator, which gives a breakdown based on your property’s location and sale price.
This question doesn’t have a one-size-fits-all answer. The amount a seller can pay depends heavily on the buyer’s mortgage type. Here’s a general breakdown of seller contribution limits:
These limits exist to prevent artificially inflating home values and to maintain the integrity of mortgage-backed loans. It’s crucial to discuss these constraints with your lender and attorney to avoid non-compliance issues. Use this helpful Buyer Closing Cost Calculator for NYC to see what your closing costs may look like and what kind of help you might request from the seller.
Of course. Particularly in a seller’s market where competition is intense a seller may decline to cover closing fees. Just because a buyer asks doesn’t mean the seller has to agree. Refusal can be based on:
Sellers should review all offers with their attorney or real estate agent to assess the financial impact of paying closing costs. For a deeper understanding, our guide on the differences between a closing attorney and real estate attorney is an excellent resource.
Technically, yes—a seller can pay all closing costs—but it depends on the purchase price, loan type, and lender restrictions. In cash deals, for example, there are no loan-related caps, so the seller and buyer can negotiate freely.
In mortgage-based transactions, the limits mentioned earlier apply. Even if a seller wants to cover all the buyer’s costs, they may be restricted by loan program rules. A good real estate attorney can help structure these agreements in a way that satisfies both parties while remaining compliant.
Yes, a VA buyer can pay seller closing costs. But the VA loan program is structured to be especially favorable to veterans, and sellers can pay:
This makes it easier for VA buyers to close without having to bring a large amount of cash to the table. Still, VA loans involve strict underwriting, and compliance with TRID real estate disclosure rules is essential.
Yes, sellers can pay closing costs on a conventional loan, but as previously mentioned, there are percentage caps based on the buyer’s down payment:
These seller contributions can be used for loan fees, discount points, escrow deposits, and more—but cannot be used for the down payment itself.
If you’re unsure what applies in your case, having a closing lawyer assist with contract negotiation can clarify what’s feasible.
Yes, a seller can pay closing costs on an FHA loan—up to 6% of the loan amount. These funds can be used for:
The FHA is designed to be buyer-friendly, particularly for first-time buyers. Buyers may find it simpler to acquire a property without depleting their funds if sellers make compromises. That said, the transaction must be arm’s-length and transparent to avoid legal issues.
In today’s digital-first real estate environment, remote closings are increasingly common. But how does this affect seller-paid closing costs? Not much—except that the timing and disclosure of seller concessions must be crystal clear in advance.
Your attorney will ensure proper documentation is submitted and signed in accordance with federal and New York State law. Learn more in our post on how remote closing works.
When handled properly, seller-paid closing costs can be a win-win for both parties. Buyers can reduce their out-of-pocket expenses, while sellers can speed up the transaction and attract more offers.
That said, the rules are complex and vary widely based on loan types, negotiation terms, and market dynamics. Whether you’re buying or selling, it’s essential to work with a seasoned real estate attorney who understands how to navigate these details and protect your investment.
Are you curious about your possible expenses? To obtain an estimate based on your property, use our user-friendly Buyer Closing Cost Calculator or Seller Closing Cost Calculator.
Need help negotiating seller concessions or understanding closing cost responsibilities?
Reach out to Moshes Law today for a real estate attorney consultation and ensure your transaction is both successful and legally sound.
Yes, in most real estate transactions, the seller can agree to pay part or all of the buyer’s closing costs. This is called a seller concession and is commonly negotiated to help make the deal more affordable for the buyer.
Sellers often cover closing costs to attract more buyers or to help move the sale forward faster. It’s especially common in slower markets or when the buyer requests help during negotiations. Covering costs can make the offer more appealing without lowering the home’s sale price.
Yes. The amount a seller can pay toward closing costs depends on the buyer’s loan type. For example, FHA loans allow up to 6% of the purchase price, while conventional loans may limit it to 3–6%. It’s important to check with the lender for specific limits.
Sometimes. A buyer may offer a slightly higher purchase price in exchange for the seller covering closing costs. This helps the buyer reduce their upfront expenses but must still meet the appraised value of the home to satisfy lender requirements.
Yes. If the seller’s contribution exceeds what the loan program allows, the buyer’s loan could be denied or delayed. Lenders carefully review all concessions to make sure they fall within guidelines. It’s best to coordinate with both your lender and attorney early on.
Definitely. A real estate attorney can explain your options, help you understand loan rules, and make sure any agreement is legally sound. Whether you’re the buyer or seller, legal guidance protects your interests and avoids costly mistakes.
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