If you are listing this fall and trying to figure out how seller concessions in San Diego actually work, here is the short version: a buyer credit and a price cut are not the same tool. At today’s rates, the same dollar spent as a rate buydown buys your buyer roughly three times more monthly relief than spending it as a price reduction. Same money out of your net. Very different effect on whether your house sells.
Key takeaways
- Redfin recorded concessions in 46.2% of U.S. home sales in May 2026, up from 43.1% a year earlier and the highest May share on record. Sixteen percent of sales had both a concession and a price drop.
- The 30-year fixed averaged 6.66% in Freddie Mac’s survey for the week of August 27, 2026 – essentially flat for weeks. The affordability problem is not solving itself, so it is landing on the negotiating table instead.
- On a $1,000,000 San Diego purchase, the same $25,000 saves a buyer about $129 a month as a price cut, or roughly $409 a month as a permanent rate buydown.
- Concessions are capped by loan program – generally 3% to 9% on conventional depending on down payment, 6% on FHA. Your buyer’s lender confirms the number.
This one is for the seller staring at a fall listing date
The kids went back to school last week, Labor Day is around the corner, and my phone has been doing the thing it does every year right about now: sellers who sat out the summer deciding whether to go this fall or wait for spring. If you already made that call and you are listing in the next few weeks, this is the next decision – not whether to give something up, but which thing.
Because here is what is true in San Diego right now. County supply has been running near 4.6 months, homes are taking around 28 days to go pending instead of the 18 we saw in early summer, and buyers know it. They are not asking for a discount because they are greedy. They are asking because a 6.66% payment on a million-dollar house is genuinely hard, and they have three other houses to look at.
The fear I hear most is some version of: if I start giving things away, where does it stop? Fair. So let’s make it a math problem instead of a feeling.
What a seller concession actually is
A seller concession – also called a seller credit or seller-paid closing costs – is money you agree to contribute toward the buyer’s costs at closing. It comes out of your proceeds, it shows up on the settlement statement, and it does not change your list price on the MLS.
That last part matters more than people realize. A price reduction is public and permanent. It resets what every future buyer and every appraiser sees. A concession is negotiated inside the deal. Two very different signals.
What the credit can be used for depends on the loan: closing costs, prepaid taxes and insurance, and discount points to buy the interest rate down. It generally cannot be handed over as cash, and it cannot exceed the buyer’s actual costs.
Why 2026 made concessions the main event
Nationally, Redfin found 46.2% of May 2026 sales included a seller concession – the highest share on record for that month, up from 43.1% a year prior. Sixteen percent of sales had a concession and a price drop, which is the version nobody wants: you cut the price, and then you paid again at the closing table.
San Diego is not Nashville – concession rates here run well below the metros where inventory exploded. But the direction is the same, and the reason is the rate. Freddie Mac’s Primary Mortgage Market Survey put the 30-year fixed at 6.66% for the week of August 27, 2026. When rates were falling, buyers waited it out. They are done waiting. They want the payment fixed now, in the deal.
The $25,000 question
Say your house goes under contract at $1,000,000 and the buyer is putting 20% down on an $800,000 loan. You are prepared to give up $25,000. Here is what each version buys.
| What you give up | What it does | Buyer’s monthly P and I | Monthly savings |
|---|---|---|---|
| Nothing | $800,000 at 6.66% | $5,141 | – |
| $25,000 price reduction | $975,000 price, $780,000 loan at 6.66% | $5,013 | $129 |
| $25,000 as a permanent rate buydown | About 3 points, roughly 5.875% | $4,732 | $409 |
| $25,000 as a closing-cost credit | Covers most of the buyer’s cash to close | $5,141 | $0 – but the deal happens |
Read that table twice. The price reduction saves the buyer about $7,700 over five years. The buydown saves them about $24,500 over the same five years. Identical cost to you. Roughly triple the value to them.
A price cut is what a seller does when they want to feel like they did something. A buydown is what a seller does when they want the house sold.
And the third row is the one people forget. Plenty of San Diego buyers are not payment-constrained, they are cash-constrained – they have the income and they are scraping the closing costs together. For that buyer, a credit toward closing is not a nice-to-have. It is the entire difference between an accepted offer and a withdrawn one.
So how much should you actually offer?
Two rules I use.
First, do not lead with it. Price the house correctly and let the concession be the thing you have in your pocket for negotiation. If you list high and advertise a credit, buyers read it as desperation and come in under both. I go through the pricing side of this in detail in how to price your San Diego home in a softening market, and it is the single highest-leverage decision you will make.
Second, know the ceiling before you negotiate. Loan programs cap what a seller can contribute:
- Conventional, primary residence: generally 3% with less than 10% down, 6% at 10-25% down, and up to 9% with 25% or more down.
- FHA: up to 6% of the sale price.
- VA: its own rules, with a 4% limit on certain concession types.
- Investment property: typically 2%.
Offering more than the cap does not help anyone – the excess gets left on the table or restructures the deal. Ask the buyer’s lender early. This is also why the flavor of concession matters: a buyer with a low down payment has a tight cap, so every dollar has to be aimed well.
The mistake I see most
Sellers treat the concession as a loss and the price cut as a strategy. It is backwards. A $25,000 price reduction is a $25,000 loss that reprices your home permanently, in public, in front of every appraiser who pulls comps for the next six months. A $25,000 buydown is the same $25,000 buying a materially better payment for the one person who is actually going to write you a check.
The exception is when your house has a real problem rather than a price problem. If the roof is the issue, no buydown fixes that – and the as-is decision is a different conversation. Concessions solve affordability. They do not solve condition, and they do not rescue a listing that was mispriced out of the gate.
Frequently asked questions
Do seller concessions lower my net proceeds the same as a price cut?
Dollar for dollar at closing, yes – a $25,000 credit and a $25,000 price cut hit your bottom line almost identically. The difference is what you get for it. The credit typically buys a stronger, faster deal, and it keeps your recorded sale price higher, which helps the comps in your neighborhood. If you want to see how the whole net picture assembles, our 2026 San Diego seller net sheet lays it out line by line.
Will a concession hurt my appraisal?
It can get attention. Appraisers are required to consider seller-paid concessions when comparing sales, and a large credit can prompt an adjustment. Reasonable, documented credits in a market where nearly half of sales include one are rarely a problem. Unusually large ones can be.
Is it too late to list this fall?
No. The fall window in San Diego runs longer than people assume, and the buyers still out here in September and October are the serious ones – they need to be in a house, not browsing. I walked through the list-now-versus-wait math in this year’s fall timing breakdown.
Want to know what your house should actually offer?
I will run your numbers both ways – price cut and buydown – and hand you a net sheet for each, so you walk into negotiation knowing your ceiling instead of guessing at it. No pressure, no obligation, and I am happy to tell you if you do not need a concession at all.
Amara Berg – REALTOR and property manager with Big Returns in San Diego. I help owners sell for more and keep more, and I would rather give you the honest number than the flattering one. I break these down on Instagram most weeks too.
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Payment figures are illustrative national-average math, not an offer, quote, or commitment to lend, and I am not a mortgage lender – your buyer’s lender determines actual pricing, points, and program limits. Rate reference: Freddie Mac PMMS, week of August 27, 2026. Nothing here is legal, tax, or lending advice; please consult the appropriate licensed professional. Amara Berg, CA DRE #01961620. Big Returns, CA DRE #02322119.