How Seller Credits Work | Salt Lake County Real Estate

Buying a home involves more than just the purchase price. Closing costs, prepaid taxes, and fees can add thousands of dollars to your bottom line. The good news? In today’s Salt Lake County market, many sellers are offering seller credits (also called “seller concessions”) to help buyers cover some of those costs.

As a top West Jordan Realtor / South Jordan Realtor, I’ve helped dozens of clients use seller credits to make buying more affordable. Here’s what you need to know.

💡 What Are Seller Credits?

A seller credit is money the seller agrees to contribute toward the buyer’s closing costs or other expenses. Instead of lowering the price, the seller gives a credit at closing to offset certain costs for the buyer.

In Utah, this is negotiated up front and spelled out in the purchase contract. Credits can cover things like:

  • Loan origination fees

  • Title and escrow fees

  • Prepaid property taxes or insurance

  • Interest rate “buy-downs” to lower your monthly payment

🏡 Why Seller Credits Are Common Right Now

The market in Salt Lake County has shifted from the ultra-competitive conditions of 2021–2022. While homes are still selling, buyers have gained a bit more leverage, especially for properties that have been on the market longer. Sellers are using credits to attract buyers and close deals without slashing their listing price.

📊 How Much Can You Get?

The amount varies. Typical credits range from 1% to 3% of the purchase price, but FHA, VA, and conventional loans each have maximums your lender will explain. The key is to work with an agent who knows how to negotiate the right amount while keeping your offer attractive.

  • FHA Loans: Maximum credit is 6% of the purchase price
  • VA Loans: Maximum credit is 4%
  • Conventional Loans: Maximum credit ranges from 3% to 9%, depending on down payment

📝 Tips for Buyers

  • Get pre-approved first. Know exactly how much credit your loan type allows.

  • Look for listings mentioning “seller concessions.” Those sellers are already open to the idea.

  • Consider a rate buydown. Credits can be used to temporarily or permanently reduce your mortgage interest rate.

  • Work with a local expert. An experienced Realtor can spot opportunities and structure your offer correctly.

📝 Tips for Sellers

  • Price strategically. Offering a credit can make your home more appealing without reducing the asking price.

  • Market the incentive. “Seller willing to pay closing costs” stands out in listings.

  • Know your limits. Credits must comply with lender rules, so consult your agent before offering.  FHA loans have specific limits on seller credits – see official guidelines here https://www.fha.com/lending_limits

👋 The Bottom Line

Seller credits can be a win-win: buyers get help with upfront costs, and sellers attract more qualified offers.

If you’re thinking about buying or selling in Salt Lake County, I’d be happy to walk you through current market conditions and how credits can work to your advantage. I also have lenders that specialize in FHA, VA and Grants. 

 

Nancy Bergman 
Your Neighborhood Realtor specializing in West Jordan, South Jordan, Herriman, Riverton and Salt Lake County - Salt Lake Home Pros - Fathom Realty
📞 858-617-9449