Real estate markets shift between three trends: a buyer’s market, a seller’s market, or something in between — a balanced market, where neither side has much leverage.
When conditions favor buyers, sellers become more willing to help cover closing costs to get a deal done. When conditions favor sellers, that willingness drops. In a balanced market, it typically falls somewhere in the middle.
Whatever the market is doing right now in southern Missouri or northern Arkansas, knowing what a seller can legally offer — and how much — puts you in a stronger spot.
This article shows you how to save money on closing costs, especially in a buyer’s market…
Market Snapshot — September 2026
Branson: buyer’s market
Springfield: balanced market
Conditions shift. Ask your agent for the current picture before you make an offer.
New to the Ozarks? The Moving to the Ozarks article is the right place to start before you think about anything else.
How to Save Money on Closing Costs: The Biggest Factor
If you’re making an offer and hoping the seller will cover some of your closing costs, the first question you should ask is: How much can a seller pay in closing costs before it becomes a problem for your loan?
This isn’t a simple, one number answer.
The amount of money you can save on closing costs largely depends on if you’re using a VA, FHA, or a conventional loan. Also, for a conventional loan, your down payment also affects how you can save money on closing costs.
Here’s how each program works, so you know what to ask for before you make the offer…
Note: This information is for educational purposes only and should not be considered financial advice. To pick the right loan for you, consult with a licensed home loan officer.
More on Home Closings Costs and Seller Concessions
Before we discuss these loan types in detail, there’s one more thing you should know: definitions of closing costs and seller concessions.
This way, you can have a good start on how to save money.
Closing costs are the standard, mandatory fees you’ll owe in a real estate transaction.
A seller concession is money the seller agrees to pay toward your closing costs.
Seller concessions can cover things like loan origination fees, prepaid taxes and insurance, discount points, or a temporary rate buydown. It cannot cover your down payment.
Every major loan type limits how much of this help you can accept. The limit exists so a seller can’t quietly inflate the sale price and hand the difference back to the buyer as “help.” Lenders check this closely, and going over the limit doesn’t kill the deal — it just triggers an adjustment, which we’ll cover below.
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Loan Types Compared: How Best to Save Money on Closing Costs
Again, your loan type shapes how you can save money on closing costs.
| Loan Type | Down Payment / Loan-to-Value (LTV) | Max Seller Concession |
|---|---|---|
| VA | Any (VA loans allow $0 down) | 4% of the home’s appraised value, in addition to standard closing costs, which the seller can pay in full |
| FHA | Any down payment | 6% of the sales price or appraised value, whichever is lower |
| Conventional | Less than 10% down (LTV above 90%) | 3% of the sales price or appraised value, whichever is lower |
| Conventional | 10%–25% down (LTV 75.01%–90%) | 6% |
| Conventional | 25% or more down (LTV 75% or less) | 9% |
| Conventional, investment property | Any | 2% |
Note: These percentages are the ceiling, not a typical outcome.
In most Ozarks market conditions, sellers have little reason to offer anywhere near the maximum. And asking for the full cap can make an offer less competitive. A concession is more often a smaller, specific amount — tied to what the Closing Disclosure actually shows — than the top of the range.
Another thing that trips up some home buyers…
A seller concession isn’t a check you get to keep. It can only cover costs you have — things like your closing costs, prepaid taxes and insurance, or discount points. If a seller offers 6% and your real costs only add up to 4%, you don’t pocket the difference. The extra amount simply doesn’t get used.
VA Loan: How to Save Money on Closing Costs
If you’re a veteran, a VA loan may be your top loan choice, anyway. Aside from the no money down perk, you can save money on closing costs, too.
Just know that VA loans work a little differently than the other two options.
The seller can pay your standard closing costs — appraisal, title work, recording fees — with no cap. On top of that, the seller can offer up to 4% of the home’s appraised value in what the VA calls “concessions.” This 4% bucket covers extras like the VA funding fee, paying off a small debt to help you qualify, or funding a rate buydown.
So, a seller helping a veteran buyer isn’t limited to 4% total. That 4% is the ceiling for the extras, stacked on top of unlimited standard closing costs.
FHA Loan: How to Save Money on Closing Costs
FHA keeps this simpler: one flat number.
The seller, or anyone else with a financial interest in the sale, can contribute up to 6% of the sales price toward your closing costs, prepaid items, and discount points, no matter how much you put down.
If a seller offers more than 6%, the extra amount doesn’t just disappear. Instead, the lender treats it as an inducement to purchase and reduces the value used to calculate your loan, dollar for dollar.
How to Save Money on Closing Costs Using a Conventional Loan
Conventional loans, backed by Fannie Mae or Freddie Mac, tie the concession limit to your loan-to-value ratio.
In plain terms: the more you put down, the more help you’re allowed to accept.
- Less than 10% down: capped at 3%
- 10% to 25% down: capped at 6%
- 25% or more down: capped at 9%
- Investment properties: capped at 2%, regardless of down payment
This tiered structure trips up a lot of buyers, because they assume the FHA-style flat percentage applies here, too. A buyer putting 5% down on a conventional loan has cash from the seller on the table — just less of it than an FHA buyer at the same price point.
Why This Matters When You’re Making an Offer in the Ozarks
Home prices across southern Missouri and northern Arkansas run well below what buyers typically pay in larger metro markets.
This means closing costs here are often a smaller dollar figure to begin with. That can work in your favor.
A seller offering 3% or 4% concessions on a $250,000 home in Springfield can realistically cover most or all of your closing costs, where the same percentage barely dents a bill in a pricier market.
That said, a concession is negotiated, not guaranteed.
Whether a seller is willing to offer one, and how much, depends on local market conditions at the time. In a competitive market, asking for less (or nothing) can make your offer stronger than asking for the cap.
Knowing your loan’s limit ahead of time isn’t about knowing what to demand. It’s about knowing what’s possible, so you and your agent can decide what’s realistic to ask for given the home, the market, and the rest of your offer.
Ready to take the next step
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On-the-ground knowledge from someone who made the move — and who’s giving you info not found in a standard relocation guide.
Frequently Asked Questions About How to Save Money on Closing Costs
How much can a seller contribute to closing costs on a VA loan?
Up to 4% of the home’s appraised value in concessions, plus unlimited standard closing costs paid separately.
Does the concession cap change if the home appraises for less than the offer price?
It can, though the exact rule depends on the loan. VA bases the 4% cap on the home’s appraised value, so a low appraisal lowers the cap directly. FHA and conventional loans use whichever number is lower — the sales price or the appraised value — so a low appraisal can shrink those caps, too. But the underlying rule isn’t identical to VA’s.
Do FHA seller concession limits change based on down payment?
No. FHA holds the limit at a flat 6% of the sales price no matter how much you put down.
Can a seller pay 100% of a buyer’s closing costs?
Sometimes, especially with a VA loan where standard closing costs have no cap. On FHA and conventional loans, it depends on whether your closing costs fall within the program’s percentage limit.
What happens if a seller offers more than the allowed concession?
The lender treats the excess as an inducement to purchase and reduces the value used to calculate your loan by that amount.
Are seller concessions the same as a price reduction?
No. A price reduction lowers what you owe permanently. A concession helps cover costs at closing but doesn’t change the loan amount the same way.
Can seller concessions pay for a mortgage rate buydown?
Often, yes — a temporary or permanent rate buydown usually counts against the concession limit, depending on the loan type.
