CONCESSIONS ARE BACK & GETTING MORE CREATIVE
FROM MORTGAGE BUYDOWNS TO INSURANCE CREDITS AND MORE, HERE ARE SOME OF THE INCENTIVES AGENTS ARE SEEING OFFERED TO BUYERS
CONCESSIONS ARE BACK & GETTING MORE CREATIVE
FROM MORTGAGE BUYDOWNS TO INSURANCE CREDITS AND MORE, HERE ARE SOME OF THE INCENTIVES AGENTS ARE SEEING OFFERED TO BUYERS
The Atlanta metro—including Atlanta, Sandy Springs, and Roswell—has seen a 20% increase in listings priced above $1 million year over year, according to Realtor.com
As the market shifts to a more balanced buyer-seller playing field, concessions have become the name of the game. In fact, in a survey of The Agency brokers, more than 60% said they’re seeing more concessions this year compared with a year ago.
With sellers wanting to stick to their asking prices (or stay as close to them as possible), agents are using creative solutions to entice buyers—from including furnishings and golf carts to paying for security staff for several months.
“Concessions aren’t a sign of desperation,” says Deborah Morton, Managing Partner of The Agency Atlanta, who says concessions are common in her area. “They’re a sign that you know how to get deals done. The most successful agents and sellers are using them smartly, tailoring each deal to fit the buyer’s needs while protecting the seller’s bottom line. That’s what it takes to win right now.”
CONCESSIONS THAT TRANSLATE TO DOLLARS SAVED—OR EARNED
Because of relatively high interest rates, more sellers are marketing their homes with assumable loans that have lower rates than current ones or are offering to buy down buyers’ mortgage interest rates in an effort to lessen monthly payments amid higher interest rates, says Jen Cameron, Managing Partner of The Agency Seattle, says. One of her more inventive concessions occurred in the recent sale of a vacation investment property that had been on the market in the Seattle area for more than a year.
The seller had already reduced the price so that it was well below nearby comps, she says, “but the real turning point came when we proposed a rent-to-own scenario while my client, the buyer, completed the process to assume the seller’s loan.”
It was a winning proposition for both parties. “My buyer could immediately begin renting the property on VRBO during the peak vacation season—even before closing,” Cameron says. “While making a modest rental payment to the seller in the interim, he’s now positioned to generate nearly double in rental income, offsetting his costs and maximizing cash flow while we finalize the loan assumption. For the seller, this strategy helped offset holding costs and finally moved a long-stagnant property toward closing.”
She adds that solutions like this are becoming more prevalent in her area, where it’s shifting from a full-on seller’s market to a more balanced landscape. Concessions are playing a larger role in the second-home and investment-property market, she says, where financing can be more complex.
Sometimes, concessions can act as the primary tools for fixing errors, including unrealistic pricing. In the case of a rent-stabilized townhouse in New York City’s West Village that sat on the market for 450 days, broker Mike Biryla helped finally close the deal with concessions that included a seller-backed $10,000 post-closing escrow to ensure that outstanding building-code violations were signed off on; giving the buyer unlimited access to visit the property after the contract was signed, and an agreement to release money for some items, including large, backyard statues that couldn’t be moved in time for the closing.
THE AGENCY GLOBAL'S SURVEY
Are you seeing sellers offer more concessions in 2025 compared to 2024?
YES, MORE
NO, FEWER
NO CHANGE
COVERING THE HIGH COST OF INSURANCE AND WARRANTIES
High-cost home insurance, particularly in high-risk fire-prone zones of Los Angeles, has become a sticking point that has been slowing sales, says Michelle Schwartz, Managing Partner and founding agent of The Agency, covering Sherman Oaks, Studio City, and Calabasas. Buyers bear the brunt: It’s significantly more costly to get a new policy.
In one recent property sale, several potential buyers were reluctant to commit because of the impact the rising cost of homeowner’s insurance would have on their monthly expenses, Schwartz says. The house had been on the market for more than 60 days, and the seller was eager to complete the deal, but without dropping the price. As a concession, he offered to cover the buyer’s first year of insurance premiums. “It was a win-win,” Schwartz says. In other L.A. sales, sellers have offered to cover the cost of a private security staff for six or more months, a tactic that’s becoming more common in celebrity neighborhoods, where safety and privacy are prime concerns.
Some sellers raise the stakes by offering multiyear home warranties instead of
the standard one-year coverage. Such coverage costs $800 to $1,500 per year and typically includes the repair or replacement of major systems and appliances or their parts that break down. Some warranties even include pool and spa equipment, HVAC systems, electrical and plumbing, pool and spa equipment, leaking-roof repairs, and structural components.
“In Los Angeles specifically, where inventory is climbing again but pricing hasn’t fully corrected, these kinds of creative concessions are often more palatable to sellers than reducing their list price, and they give buyers a sense of short-term financial relief,” Schwartz says.
MORE ON 'CREATIVE CONCESSIONS'
In the Atlanta metro area, some listings are still getting immediate offers while others sit for 60 or 90 days. According to Morton, they’re “seeing concessions used in more layered, strategic ways—especially since August 2024, when the long-standing practice of advertising buyer-agent compensation in the multiple listing service effectively ended.” Before the passage of that law, the seller typically paid the fee for the buyer’s agent, but now who pays that fee has become a key component of the concession package.
“Most sellers are still covering the fee, but now it’s treated as a line item, just like a closing-cost credit or a mortgage interest-rate buydown,” Morton says. “And since sellers care most about net proceeds, all of it is evaluated together.”
In addition to the standard concessions, sellers of newly constructed homes sometimes go so far as to offer upgraded appliances and design packages to entice buyers. Even during bidding wars, creative concessions are being used as leverage by buyers, according to Traci Garontakos, Managing Partner of The Agency Indianapolis.
When a custom home in the Holliday Farms Golf Community just northwest of Indianapolis recently came on the market, it elicited several offers in the first six hours. The winning bidder offered $2.875 million—$25,000 over the asking price. But there were some strings: He requested that the golf cart, the pool and outdoor furniture, and several pieces of furniture be included in the price.
