What is the most seller credit I can get? | Military Home Loans

What is the most seller credit I can get?

Dump truck

 The house has been on the market for 6 months. Zero offers. They moved out of state 2 months ago. It’s a buyer’s market.

I want to ask for the max seller credit I can get.

Seller Credit – It’s not free money

We’ve had clients get $12,000 in seller credit. It feels great. What a cool big number.

Of course, they could have purchased the home for $12,000 less if they hadn’t gotten any credit. The seller would have made the exact same amount.

All that seller credit you’re getting is really just driving up your purchase price. A higher purchase price means:

  • Slightly higher monthly payments
  • More appreciation needed just to reach break even
  • Reduced profits when you do eventually sell. Sorry, no free lunch

The misunderstood 4% seller ‘concessions’ cap

You’ve probably read the maximum seller credit you can get is capped by the VA at 4%.

Close, but the definition of what is seller credit (used for anything) and what the VA defines as seller concessions (used to pay non-ordinary buyer expenses) is different.

It’s a long explanation, but the short answer is you can have 5% or even 6% seller credit, and still be under the 4% seller concessions limit per VA rules.

Honestly, if you’re getting that much seller credit you’re going to have a bigger problem.

The house still needs to appraise at the purchase price

Let’s say you’re getting $20,000 of seller credit on a $400,000 purchase. That means the seller is only making $380,000. You need the property to appraise for $400,000 for the deal to work.

Sure, sellers are sometimes desperate.

But if the home could appraise for $400,000, don’t you think the seller would wait for a buyer that would pay that?

If your deal is the only one the seller can get, it’s probably because the house is worth closer to $380,000, vice $400,000. Which means your appraisal is probably going to come in low, and derail the deal.


