Can You Ask the Seller to Pay Your Closing Costs in Sioux Falls?

Yes. In Sioux Falls you can ask the seller to pay some or all of your closing costs through a seller concession written right into the purchase agreement. How much they can pay is capped by your loan type, and the seller almost always wants something in return — usually a firmer price.

Quick Answer: Yes — a Sioux Falls buyer can ask the seller to cover closing costs through a seller concession in the offer. Loan rules cap the amount: roughly 3% to 9% of the price on a conventional loan, up to 6% on FHA, and up to 4% on VA. The trade-off is that sellers usually expect closer to full price in exchange.

What a seller concession really is

A seller concession (also called a seller credit or seller-paid closing costs) is money the seller agrees to put toward your closing costs at the settlement table. It is negotiated as a term of your offer, then applied as a credit on the closing statement your title company prepares — in Sioux Falls that is often First Dakota Title or another local title company, since South Dakota closes through a title company and does not require an attorney.

The key thing to understand: a concession does not lower the sale price. The price stays the same, and the seller simply hands back a defined dollar amount toward your costs. That distinction matters for your loan, your appraisal, and the seller’s bottom line.

Closing costs in Sioux Falls typically run about 2% to 5% of the purchase price for a buyer, covering loan origination, the appraisal, title insurance, recording fees, and prepaids like homeowners insurance and property taxes. A concession is one of the main ways buyers avoid bringing all of that to closing in cash. (If you would rather finance those costs instead, see how rolling closing costs into your loan works.)

How much can the seller pay? Limits by loan type

Your loan program sets the ceiling. These are the interested-party contribution limits as of 2026:

Conventional loan — On a primary residence, the Fannie Mae Selling Guide allows up to 3% of the price with less than 10% down (loan-to-value above 90%), up to 6% with 10% to about 25% down, and up to 9% with 25% or more down.
FHA loan — The seller can contribute up to 6% of the lesser of the sale price or appraised value toward closing costs and prepaids, per HUD Handbook 4000.1.
VA loan — Seller concessions are capped at 4% of the value, though the U.S. Department of Veterans Affairs treats ordinary buyer closing costs the seller pays separately, so the effective help can be larger.
USDA loan — Common in Madison, Canistota, and other rural-eligible areas, USDA Rural Development generally allows seller concessions up to 6% of the loan amount.

Two rules apply to every loan type. First, a concession can never exceed your actual closing costs — you cannot pocket the difference or apply it to your down payment. Second, the appraisal has to support the price, because the concession is baked into that price.

What a concession actually costs you as the buyer

Here is the trade-off buyers miss. If you offer full price and ask for a $10,000 concession, you are really asking the seller to net $10,000 less. To get a yes, most buyers offer a little more on price to offset it.

Say a home is listed at $340,000 — right around the July 2026 Sioux Falls median of $340,450. You might offer $345,000 with a $10,000 seller credit. The seller nets about the same as a clean $335,000 offer, and you finance the extra $5,000 over 30 years instead of paying $10,000 in cash today. At the 6.65% average 30-year rate Freddie Mac reported on August 20, 2026, that extra $5,000 adds only about $32 a month — a reasonable trade if cash to close is tight.

A concession is most powerful when you use it to buy down your interest rate instead of just covering fees. A permanent rate buydown paid by the seller can save far more over time than the same money knocked off the price — the math is in my post on rate buydown vs. price cut. If you are still mapping out your total cash needs, start with how much cash you actually need to buy in Sioux Falls.

Should a Sioux Falls seller agree to pay closing costs?

If you are on the selling side, a concession request is not an insult — it is a tool. What matters is your net, not the headline price. A $345,000 sale with a $10,000 credit and a $335,000 clean sale put nearly the same money in your pocket, and South Dakota keeps your costs low: the state real estate transfer fee is just $0.50 per $500 of price — about $340 on a median home — paid by the seller.

Agreeing to a concession can also widen your buyer pool to well-qualified people who are simply short on upfront cash, which can matter when your home has been sitting. To see how credits fold into your bottom line, run the numbers with my guide on what you net selling a home in Sioux Falls.

Why concessions are back on the table in 2026

For most of the past few years, Sioux Falls sellers held the leverage and rarely needed to give anything up. That is loosening. In July 2026, new listings rose 9.6% year over year to 523 homes, and sellers received an average of 97.7% of their original list price, according to the Realtor Association of the Sioux Empire. More inventory — including builders adding new construction along the Veterans Parkway and southeast growth corridors — means buyers have more room to negotiate terms like concessions than they did at the peak.

That does not mean every seller will say yes. On a well-priced home with multiple offers, asking for a big credit can cost you the deal. On a home that has been listed a while, it is often the difference-maker. Reading which situation you are in is exactly the kind of call I help clients make before we write the offer.

Frequently Asked Questions

Do seller concessions lower the purchase price?

No. A concession is a credit toward your closing costs at settlement, not a price reduction. The sale price stays the same, which is why the appraisal still has to support that full number.

Can I use a seller concession for my down payment?

No. Concessions can only go toward closing costs, prepaids, and things like a rate buydown — never toward your down payment, and never as cash back to you. Any amount above your actual closing costs is lost.

How much are closing costs for a buyer in Sioux Falls?

Plan on roughly 2% to 5% of the purchase price, or about $7,000 to $17,000 on a median-priced home. That covers loan fees, the appraisal, title insurance, recording, and prepaid taxes and insurance.

Will asking for closing costs hurt my offer?

It can on a competitive, well-priced listing where sellers have multiple clean offers. On a home that has been on the market a while, most sellers will work with you, especially if you keep the price close to their asking number.

Who holds my earnest money in South Dakota?

Your earnest money is typically held by the title company handling the closing, not the seller or agent. It is credited toward your costs at closing or refunded if you cancel under a valid contingency.

Ready to run your own numbers?

You can absolutely ask a Sioux Falls seller to pay your closing costs — the smart move is structuring the offer so the concession helps you without costing you the home. If you want to know how much to ask for and how to frame it in this market, download the free Sioux Falls Buyers Guide, and reach out anytime. I’m happy to walk through your specific situation, no pressure.

About Tyce Ortman
Tyce Ortman is a residential real estate agent with the Jeff Merrill Team at eXp Realty, serving Sioux Falls, South Dakota and surrounding communities including Brandon, Harrisburg, and Tea. He works with both buyers and sellers, guiding them from first search or listing all the way through closing. Reach Tyce at (605) 413-7903.