What counts as a valid concession?

A valid concession clearly states the amount or description of services, how it will be applied, and any conditions. Lenders require specific language and may limit allowable concessions, so always confirm with the lender.

Do lenders always accept seller concessions?

Not always. Lenders evaluate concessions against underwriting rules and loan-to-value limits. Submit the agreement early for lender review to avoid last-minute disallowance.

Is notarization required?

Notarization requirements vary by state and by lender. Many jurisdictions require a notary for real estate documents; obtain notarization if the lender or title company requests it.

Can a concession be applied after closing?

Yes, when the agreement specifies post-closing reimbursement, but post-closing payments require clear invoicing, lien releases where applicable, and updated settlement records to prevent disputes.

How should I store the signed agreement?

Keep an encrypted copy with an audit trail in your transaction management or document storage system and retain paper originals if required by state or lender policies.

What if parties disagree after closing?

Disputes typically look to the written agreement. Maintain detailed records of performance, invoices, and communications; consult counsel for breach or indemnity questions.

Electronic Signature
Templates
Real estate
Real Estate Concession Agreement

Real Estate Concession Agreement

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REAL ESTATE CONCESSION AGREEMENT

This Real Estate Concession Agreement (the Agreement) is made and entered into on by and between Seller: and Buyer: .

PARTIES

Seller — Full legal name and contact Seller — Mailing address Buyer — Full legal name and contact Buyer — Mailing address

PROPERTY IDENTIFICATION

Property Street Address Parcel / APN Legal Description

REFERENCE TO PURCHASE AGREEMENT

This Agreement supplements and modifies the Purchase Agreement between Seller and Buyer dated (the Purchase Agreement) concerning the Property identified above. In the event of any conflict between this Agreement and the Purchase Agreement, the terms of this Agreement shall govern solely with respect to the concessions described herein.

CONCESSION TERMS

Type of concession (check all that apply):

Credit at Closing Escrow Holdback for Repairs Interest Rate Buydown Closing Cost Assistance Concession Amount or Formula Method of Application If escrow holdback, holdback amount and expiration/conditions Concession Expiration or Cutoff Date

CONDITIONS AND CONTINGENCIES

The concession described above shall be conditioned upon the following (check applicable and complete details):

Buyer inspection period of Financing contingency applies Concession payable at Closing scheduled on Concession survives closing until

REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGEMENTS

Seller represents and warrants that Seller has the full right and authority to grant the concession and to modify the Purchase Agreement as set forth in this Agreement. Buyer acknowledges receipt of the concession and agrees that the concession does not increase Seller's liability beyond the specific monetary or performance obligation stated herein. Neither party shall construe this Agreement as a waiver of any disclosure obligation required by law.

INDEMNIFICATION AND RELEASE

Each party shall indemnify and hold harmless the other party and its agents from and against any liabilities, claims, losses or expenses arising solely from that party's breach of this Agreement or its willful misconduct. The concession payment or credit shall not limit any party's right to pursue equitable or legal remedies for material breach of the Purchase Agreement, except as expressly provided herein.

DEFAULT; REMEDIES

If Buyer or Seller defaults under the Purchase Agreement and such default prevents the conditions for the concession from being satisfied, the non-defaulting party's remedies shall be governed by the Purchase Agreement, except that the non-defaulting party may offset against any concession amount the actual damages resulting from the default. Specific performance shall remain an available remedy where permitted by law.

NOTICES

Seller Notice Address for Purposes of This Agreement Buyer Notice Address for Purposes of This Agreement

Notices shall be effective upon delivery by hand, nationally recognized overnight courier, or three (3) business days after deposit in the United States mail, postage prepaid, to the addresses provided above.

MISCELLANEOUS

Governing Law: The terms of this Agreement shall be governed by and construed in accordance with the laws of the state of without regard to conflict of laws principles. This Agreement constitutes the entire agreement between the parties with respect to the concession and supersedes all prior negotiations and understandings. Any amendment must be in writing and signed by both parties. If any provision is held invalid, the remaining provisions shall continue in full force and effect.

ACKNOWLEDGMENT

Each party acknowledges that it has had the opportunity to review this Agreement with legal counsel and that each provision is binding and enforceable to the extent permitted by law.

Seller

Printed Name:

By:

Date:

Buyer

Printed Name:

By:

Date:

What a Real Estate Concession Agreement Is and When It’s Used

A Real Estate Concession Agreement documents terms where a seller, builder, or lender provides a monetary credit, repair allowance, or other concession to a buyer as part of a real estate purchase or lease transaction. It clarifies the concession amount or services, how and when the concession will be applied (for example at closing, via escrow credit, or as a post-closing payment), and any conditions tied to entitlement. The agreement reduces ambiguity between parties, helps lenders and title companies process funds correctly, and becomes part of the transaction record used for closing and post-closing accounting.

Why a Clear Concession Agreement Matters

A written concession agreement protects buyer and seller expectations, ensures correct lender and title handling, and documents financial adjustments for tax and closing records.

Who Typically Prepares and Signs a Concession Agreement

Parties involved in real estate transactions commonly use concession agreements to formalize seller credits, repairs, or incentives.

Buyers and Buyers’ Agents: Use the agreement to confirm receipt and application of credits toward closing costs or repairs.
Sellers and Listing Agents: Document offered incentives and any conditions or deadlines tied to the concession.
Lenders and Title Companies: Require clear instructions to accept credits at closing and reflect them correctly on the closing statement.

A clear signature block and routing instructions reduce delays at closing and help avoid post-closing disputes.

Core Elements to Include in a Professional Concession Agreement

A concise agreement should define the concession precisely, set timing and disbursement mechanics, assign responsibilities for inspections or repairs, and include signature and notarization provisions when required by jurisdiction or lender policy.

Parties

Names and roles of buyer(s), seller(s), listing/buying agents, lender, and title company.

Concession Type

Specify cash credit, repair allowance, seller-paid fees, or alternative credit with exact dollar amounts or maximums.

Application Timing

State whether the concession is applied at closing, by escrow disbursement, or as a post-closing reimbursement.

Conditions

List prerequisites such as inspection outcomes, repair completion standards, or lender approval requirements.

Accounting

Detail how the concession appears on the Closing Disclosure or settlement statement and who prepares the entries.

Signatures

Signature blocks, dates, and any required notarization or witness language per state or lender.

Step-by-Step: Preparing and Executing a Concession Agreement

Follow these steps to create a valid, lender-acceptable concession agreement and reduce the risk of closing delays.

01

Drafting: Identify parties, property, concession type, exact amount, and conditions.
02

Review with Lender: Confirm lender acceptance and any required language or limits on seller concessions.
03

Signatures and Notarization: Obtain required signatures; notarize if lender or state rules require it.
04

Deliver to Title/Escrow: Provide the signed agreement to title/escrow to update the closing statement and disbursement instructions.

Configuring an Online Concession Agreement Workflow

Set up a digital workflow to collect signatures, route the agreement to lender and title, and store an audit trail.

Field	Configuration
Signer Order	Buyer → Seller → Lender → Title/Escrow
Authentication	Email plus SMS code or access code for lender/title verification
Conditional Fields	Show repair allowance details only if 'repairs' selected as concession purpose
Retention	Save signed PDF with audit trail and export to closing package

Digital Signing and Delivery Considerations

Choose a signing platform that provides secure signatures, an audit trail, and integration with title or transaction management systems.

File Formats: Accepts PDF and DOCX for signed, compliant outputs
Integrations: Works with CRM, NetSuite, Google Workspace, and title platforms
Authentication: Supports email links, SMS codes, and advanced signer verification

Retain signed agreements in encrypted storage with role-based access and export capabilities for closing packages and post-closing audits.

Where to Send the Agreement During Closing

Route the executed agreement to the parties and entities that must act on or record it so the concession is correctly credited at closing.

Buyer and Seller: Each party receives final executed copy for records and tax basis tracking
Lender: Lender receives the agreement to verify that concessions meet underwriting rules
Title/Escrow: Title company updates Closing Disclosure and escrow instructions to reflect the credit
Recording Office: If concession affects deed or encumbrance, route documents for recording as required

Typical Timing and Deadlines to Watch

Concession agreements are time-sensitive; align their deadlines with contract contingencies, lender review windows, and the closing date to avoid fund disallowance.

Contract Contingency Period:

Prepare and agree on concession before inspection/repair contingency expiration

Lender Approval Window:

Submit agreement early enough for lender review before closing

Closing Date:

Signed agreement must be in escrow prior to closing to affect the Closing Disclosure

Recording Deadline:

If recording is necessary, confirm county recording timelines and fees

Post-Closing Reimbursement:

If concession reimburses work post-closing, set clear invoice submission and payment deadlines

Key Milestones from Agreement to Closing

A typical milestone sequence helps parties coordinate lender review, title updates, and final disbursement of funds.

01

Negotiate Concession

Agree concession amount and purpose during purchase negotiations

02

Draft Addendum

Prepare concession agreement or contract addendum specifying mechanics

03

Lender & Title Review

Provide copies to lender and title for approval and settlement entry

04

Final Execution

All parties sign and return executed agreement to escrow before closing

Consequences of an Incorrect or Incomplete Agreement

Closing Delays: Title or lender refusal

Financial Loss: Misapplied credits or missing reimbursements

Contract Disputes: Post-closing litigation risk

Recording Errors: Clouded title or incorrect public record

Tax Implications: Misreported credits affecting basis

Invalid Signature: Unsigned or improperly notarized

Common Preparation Mistakes to Avoid

Leaving the concession purpose vague or open-ended, which can cause lender rejection or escrow errors.
Not confirming lender limits on seller concessions, resulting in reduced allowable credit or underwriting issues.
Failing to route the signed agreement to title/escrow early enough to update the Closing Disclosure.
Using inconsistent amounts or dates between the purchase contract, addendum, and concession agreement.

Essential Data and Security Expectations for Stored Agreements

Encryption: TLS 1.2/1.3 in transit, AES-256 at rest

Audit Trail: Timestamped events, IP, and signer details

Access Controls: Role-based permissions and SSO

Compliance: ESIGN, UETA, SOC 2 Type II

HIPAA: BAA available if needed

Retention: Tamper-evident storage and exportable logs

Real-World Examples of Concession Agreements in Use

These examples illustrate how concessions are applied and documented in common scenarios.

Builder Closing Credit

A homebuilder offers a $5,000 closing credit to the buyer for lender-required repairs

Credit applied at closing on the settlement statement
The signed concession agreement and scope are delivered to lender and title, preventing disallowance and ensuring funds are reflected correctly.

Seller Appraisal Gap

Seller agrees to contribute $3,000 toward an appraisal shortfall to secure a qualified buyer

Funds credited at closing via escrow instructions
Title company records the concession on the Closing Disclosure to document the adjustment and satisfy lender underwriting rules.

eSignature Pricing and Feature Snapshot for Document Execution

Compare common vendor pricing and features relevant to executing Real Estate Concession Agreements. signNow appears first in the comparison per vendor data.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial, no credit card	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes (Business Premium)	Yes	Yes	Yes	Varies by plan
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes (BAA)	Yes	Yes	No	No
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions About Concession Agreements

Answers to typical questions about execution, lender acceptance, and recordkeeping for concession agreements.

Need help? Contact support

What counts as a valid concession?
A valid concession clearly states the amount or description of services, how it will be applied, and any conditions. Lenders require specific language and may limit allowable concessions, so always confirm with the lender.
Do lenders always accept seller concessions?
Not always. Lenders evaluate concessions against underwriting rules and loan-to-value limits. Submit the agreement early for lender review to avoid last-minute disallowance.
Is notarization required?
Notarization requirements vary by state and by lender. Many jurisdictions require a notary for real estate documents; obtain notarization if the lender or title company requests it.
Can a concession be applied after closing?
Yes, when the agreement specifies post-closing reimbursement, but post-closing payments require clear invoicing, lien releases where applicable, and updated settlement records to prevent disputes.
How should I store the signed agreement?
Keep an encrypted copy with an audit trail in your transaction management or document storage system and retain paper originals if required by state or lender policies.
What if parties disagree after closing?
Disputes typically look to the written agreement. Maintain detailed records of performance, invoices, and communications; consult counsel for breach or indemnity questions.

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