In one line: Money the seller contributes toward the buyer's costs instead of cutting the price.
A seller concession is a credit at closing toward the buyer's closing costs, prepaid items or a rate buydown, written into the contract. The price stays where it is; the buyer's cash to close falls.
Sellers prefer it to a price cut because the comps still show the higher price; buyers prefer it when cash is tighter than monthly payment. Lenders cap concessions at a share of the price that depends on the loan and the down payment, commonly 3% to 6% for conventional loans.
In a market where a third of listings have already cut, a concession is often the easier ask than a second cut, and the inspection report is the usual reason to ask for one.
A worked example
Price $400,000, inspection finds a $9,000 roof repair. Instead of a cut to $391,000, the contract adds a $9,000 seller credit toward closing costs. The comps still show $400,000; the buyer's cash to close falls by $9,000.
Questions people ask
How much can a seller contribute?
Lenders cap it: commonly 3% of the price on a conventional loan under 10% down, 6% at 10% to 25% down, and 6% on FHA. A credit above the buyer's actual closing costs is lost, so size it to the costs.
Is a concession better than a price cut?
For a buyer short on cash, yes. For one with cash and a long hold, the price cut lowers every payment for thirty years. Run both in the payment calculator.