San Diego Seller Concessions 2026: Why 60% of Sellers Are Losing Money on Rate Buydowns
TL;DR: Seller Concessions Are Costing You Thousands
60% of San Diego sellers now offer concessions—rate buydowns and closing cost credits that can easily exceed $40,000-$60,000 on median-priced homes. When you factor in carrying costs and fall-through risk, a cash offer at 94% of list price often nets you more money than a financed offer at full price with expensive concessions. Call (619) 777-1314 for a no-obligation cash offer today.
If your San Diego home has been on the market for more than three weeks, you've likely had at least one real estate agent suggest offering buyer concessions. Maybe it's a 2-1 rate buydown. Perhaps closing cost credits. The pitch sounds reasonable: sweeten the deal to attract buyers in a competitive market.
But here's what they're not telling you: 60% of San Diego sellers are now offering concessions, making it one of the highest rates in the entire nation according to recent Axios reporting. This isn't a strategic advantage anymore—it's the new baseline. And for many sellers, these concessions are costing thousands of dollars that could have stayed in their pockets with a different approach.
The good news? There's an alternative that eliminates concessions entirely while still attracting serious buyers: cash offers. Let's break down the real math behind seller concessions and show you why a cash offer at 92-95% of asking price might actually net you more money than a financed offer with expensive buydowns and credits.
What Are Seller Concessions? Understanding the Types
Seller concessions are financial incentives you offer to help buyers with their upfront costs. In the current San Diego market, these typically fall into three categories:
1. Closing Cost Credits (3-9% of Purchase Price)
These are direct payments toward a buyer's closing costs. The amount varies dramatically by loan type:
| Loan Type | Maximum Concession | Cost on $1,050,000 Home |
|---|---|---|
| Conventional (<10% down) | 3% of purchase price | $31,500 |
| Conventional (10-25% down) | 6% of purchase price | $63,000 |
| FHA Loan | 6% of purchase price | $63,000 |
| VA Loan | 4% of purchase price | $42,000 |
Source: VA Loan Network and The Mortgage Reports
At San Diego's current detached median price of $1,050,000 (up 5.0% year-over-year per the Greater San Diego Association of REALTORS), even a modest 3% concession means writing a check for $31,500.
2. Rate Buydowns (2-3% of Loan Amount)
A 2-1 buydown reduces the buyer's interest rate by 2% in year one and 1% in year two before returning to the note rate. With the average 30-year mortgage rate at 6.16% as of January 2026, these buydowns have become increasingly popular.
The cost? Typically 2-3% of the loan amount, according to U.S. News mortgage guides. On a $1,050,000 home with 20% down ($210,000), the loan amount is $840,000. A 2-1 buydown would cost you:
- Low estimate (2%): $16,800
- High estimate (3%): $25,200
That's money coming directly out of your proceeds at closing—not spread over time, but paid upfront from your equity.
3. Combination Packages: The Double Hit
Many motivated sellers are offering both closing cost credits AND rate buydowns simultaneously. This combination can easily exceed $40,000-$60,000 on a median-priced San Diego home. According to market reports from local real estate forecasters, these hybrid packages have become standard practice once a listing hits the 21-day mark without an accepted offer.
The True Cost of Concessions: Breaking Down the Math
Let's run the numbers on a typical Pacific Beach home to understand what concessions actually cost you. We'll use real market data from January 2026.
Scenario: $1,100,000 Pacific Beach Home
Your Pacific Beach home is listed at $1,100,000. You've had showings but no offers after 25 days. Your agent recommends offering a 2-1 buydown plus 3% closing cost credits to compete.
| Cost Item | Amount | Calculation |
|---|---|---|
| List Price | $1,100,000 | — |
| Loan Amount (20% down) | $880,000 | $1,100,000 × 80% |
| 2-1 Buydown Cost | $22,000 | $880,000 × 2.5% |
| Closing Cost Credit | $33,000 | $1,100,000 × 3% |
| Total Concessions | $55,000 | — |
| Agent Commission (5%) | $55,000 | $1,100,000 × 5% |
| Transfer Tax | $1,210 | $1.10 per $1,000 |
| Other Closing Costs | $5,000 | Escrow, title, etc. |
| Net to Seller | $983,790 | After all costs |
You walked away with $983,790 on a $1,100,000 sale—only 89.4% of the list price.
Alternative: Cash Offer at 94% with Zero Concessions
Now let's look at a cash offer scenario. Cash buyers typically offer 92-95% of list price but require zero concessions, no repairs, and close in 7-14 days.
| Cost Item | Amount | Calculation |
|---|---|---|
| Cash Offer Price | $1,034,000 | $1,100,000 × 94% |
| Buyer Concessions | $0 | None required |
| Agent Commission (5%) | $51,700 | $1,034,000 × 5% |
| Transfer Tax | $1,137 | $1.10 per $1,000 |
| Other Closing Costs | $3,500 | Lower with cash |
| Net to Seller | $977,663 | After all costs |
Wait—the cash offer at 94% of list price nets you $977,663, only $6,127 less than the financed offer at full price with concessions. But there's more to consider:
- Time savings: 7-14 days vs. 43-49 days average (per current San Diego market data)
- Carrying costs: Each extra month costs you mortgage, HOA, utilities, insurance
- Zero fall-through risk: No appraisal contingency, no financing contingency
- As-is condition: No repairs or credits from inspection
When you factor in 1-2 months of carrying costs (easily $3,000-$5,000 per month for a $1.1M home) plus the certainty of closing, the cash offer often nets you more money AND saves you stress.
Why San Diego Sellers Are Offering More Concessions in 2026
The concession trend isn't happening in a vacuum. Several market forces have converged to create this environment:
The 21-Day Threshold
Market analysis from SD Housing Market shows that once a listing exceeds 21 days on market (DOM), agents typically recommend offering concessions. This has become such a standard practice that buyers and their agents now expect it.
The problem? In early 2026, most San Diego homes are taking 43-49 days to go under contract, meaning the majority of listings are hitting this threshold and entering concession territory.
Elevated Mortgage Rates
With the average 30-year mortgage rate at 6.16% in January 2026, monthly payments have become a significant barrier. On a $1,050,000 home with 20% down, the monthly principal and interest payment is approximately $5,130—before taxes, insurance, and HOA fees.
Many buyers who could afford the down payment are struggling to qualify for the monthly payment. Rate buydowns offer temporary relief, making the home more affordable in years one and two when buyers hope to refinance to lower rates.
Inventory Increases Creating Buyer Options
San Diego County inventory has increased significantly from the tight 2020-2023 market, with 4,683 active listings countywide as of early 2026. While not oversupplied, this represents enough choice that buyers can negotiate more aggressively.
According to Axios San Diego, San Diego's 60% seller concession rate ranks among the highest in the nation—only Seattle, Portland, and Atlanta had higher rates during the first quarter of 2026.
The Shift from Seller's Market to Balanced Market
During the 2020-2023 seller's market, concessions were essentially nonexistent. Buyers competed with escalation clauses and waived contingencies. The dramatic reversal to 60% of sellers offering concessions represents a fundamental market shift.
Sellers who remember receiving multiple over-asking offers just 2-3 years ago are now experiencing a very different reality—one where they're expected to pay thousands to incentivize buyers who have other options.
Alternatives to Concessions: The Cash Offer Advantage
Cash offers eliminate the concession equation entirely. Here's why they're increasingly attractive to sellers in the current market:
No Lender-Related Fees
According to cash closing cost analysis, cash buyers avoid loan origination fees, mortgage insurance, and appraisal requirements. While they still pay for title searches, escrow, and property taxes, overall closing costs typically range from 2-3% of purchase price versus 2-5% for financed buyers.
More importantly for sellers: cash buyers don't need your money to close. They're not asking for rate buydowns because they're not getting a rate. They're not asking for closing cost credits because their costs are minimal and they have the cash to cover them.
Faster Closings = Lower Carrying Costs
Cash transactions typically close in 7-14 days versus 30-45 days for financed purchases. For San Diego sellers, this time savings translates directly to money:
- Mortgage payment: $3,000-$6,000/month depending on home value
- Property taxes: Prorated daily
- HOA fees: $200-$800/month for many condos
- Utilities and insurance: $300-$500/month
- Maintenance and upkeep: Ongoing costs for vacant property
On a $1.1M Pacific Beach home, carrying costs easily reach $4,000-$5,000 per month. Closing 30 days faster saves you $4,000-$5,000—money that partially or fully offsets the lower purchase price of a cash offer.
Zero Fall-Through Risk
Financed offers come with multiple contingencies that can kill the deal:
- Appraisal contingency: If the home doesn't appraise at contract price, the buyer can renegotiate or walk
- Financing contingency: If the buyer's loan isn't approved, the deal falls through
- Inspection contingency: Buyers can request repairs or credits based on inspection findings
According to real estate closing analysis, cash offers eliminate financing contingencies related to the borrower's income, employment, and credit. This leads to significantly lower fall-through rates.
When you're already carrying a home for 40+ days, the last thing you need is a deal to fall apart in week three, forcing you back to square one with a property that now shows "back on market" status—a red flag to future buyers.
As-Is Purchase Terms
Many cash buyers, particularly investors and companies that buy homes directly, purchase properties as-is. This means:
- No repair requests from inspection
- No credits for deferred maintenance
- No last-minute renegotiations before closing
For sellers in Pacific Beach, La Jolla, or other coastal communities with older homes, avoiding repair negotiations can save thousands in unexpected costs or credits.
Neighborhood-Specific Insights: Where Concessions Hit Hardest
Not all San Diego neighborhoods are experiencing concessions equally. Here's what's happening in key markets:
Pacific Beach: Competing with New Construction
Pacific Beach saw its median price decline 11% to $1,250,000 according to coastal market analysis, despite having only 45 listings—a severe inventory shortage. Sellers are offering aggressive buydowns to help buyers qualify, but these concessions can easily exceed $30,000-$40,000. Get a cash offer for your Pacific Beach home today.
La Jolla: High-End Market Complexity
When you're selling a $2M+ La Jolla home, a 3% closing cost credit is $60,000+. Combined with a rate buydown, total concessions can approach $100,000—a staggering amount that significantly impacts your net proceeds. La Jolla cash buyers attract substantial interest from equity-rich individuals.
Downtown San Diego: Condo Concession Wars
Downtown condo sellers face direct competition from new construction offering modern amenities and builder concessions. Builder-funded buydowns can trim $400-$700 per month for 12-24 months. Resale condo sellers find themselves forced to match these builder incentives. Sell your Downtown condo for cash to avoid this arms race.
Point Loma and Ocean Beach: Coastal Premiums
Point Loma and Ocean Beach maintain strong demand due to limited supply and coastal premiums. However, even these desirable neighborhoods are seeing increased concession rates as buyers become more selective. The 21-day threshold applies here as well. Get a cash offer in Point Loma today.
North Park and South Park: Urban Core
North Park and South Park appeal to first-time buyers and young professionals—demographics heavily impacted by current mortgage rates. These buyers are often requesting maximum allowable concessions (3-6% of purchase price) because they're stretching to afford the down payment. Investors buying North Park rental properties with cash provide an alternative.
When Cash Offers Make the Most Sense
Cash offers aren't always the best choice, but they often win when you prioritize:
1. Speed and Certainty Over Maximum Price
If you need to relocate for work, avoid dual mortgage payments, or simply want the transaction finished, a cash offer's 7-14 day timeline is invaluable. The difference between netting $977,000 in two weeks versus $983,000 in two months often favors the faster option when you factor in carrying costs and stress.
2. Avoiding Repair Negotiations
Older homes in coastal neighborhoods like Pacific Beach, Ocean Beach, and Point Loma often have deferred maintenance, aged systems, or cosmetic issues. Financed buyers typically conduct thorough inspections and request repairs or credits. Cash buyers purchasing as-is eliminate this negotiation entirely.
3. Properties That May Not Appraise
If your home has unique features, unusual layouts, or you're testing the high end of market value, appraisal risk is significant. A financed buyer's offer can fall apart if the appraisal comes in below contract price. Cash buyers don't need appraisals, eliminating this risk entirely.
4. Timing-Sensitive Situations
Sellers facing foreclosure, divorce, estate settlement, or financial hardship often can't afford to wait 45+ days for traditional financing. Cash offers provide fast liquidity when time matters more than squeezing every last dollar from the sale.
The Math: Why 94% Cash Can Beat 100% Financed with Concessions
Let's put it all together with a final comparison that includes timing and carrying costs:
| Scenario | Financed Offer | Cash Offer |
|---|---|---|
| List Price | $1,100,000 | $1,100,000 |
| Offer Price | $1,100,000 (100%) | $1,034,000 (94%) |
| Buyer Concessions | -$55,000 | $0 |
| Agent Commission (5%) | -$55,000 | -$51,700 |
| Closing Costs | -$6,210 | -$4,637 |
| Days to Close | 45 days | 10 days |
| Carrying Costs (35 extra days) | -$4,500 | $0 |
| Fall-Through Risk | 15-20% chance | <2% chance |
| Net Proceeds | $979,290 | $977,663 |
| Real Difference: $1,627 (0.15%) | ||
The financed offer with concessions nets you just $1,627 more—but requires 35 additional days, carries substantial fall-through risk, and may still result in repair credits from inspection. For many sellers, the cash offer's certainty and speed make it the superior choice.
Frequently Asked Questions About San Diego Seller Concessions
Are seller concessions really that common in San Diego right now?
Yes. According to Axios San Diego reporting, approximately 60% of San Diego home sellers are offering concessions in 2026—among the highest rates in the nation. Only Seattle, Portland, and Atlanta had higher rates during Q1 2026. This represents a dramatic shift from the 2020-2023 seller's market when concessions were virtually nonexistent.
What's the typical cost of a 2-1 rate buydown in San Diego?
A 2-1 buydown typically costs 2-3% of the loan amount according to mortgage industry sources. On San Diego's median detached home price of $1,050,000 with 20% down, the loan amount is $840,000. This means the buydown costs $16,800-$25,200. Combined with closing cost credits of 3-6%, total concessions frequently exceed $40,000-$60,000.
Why do agents recommend concessions after 21 days on market?
Market data from SD Housing Market analysis shows that listings exceeding 21 days on market are statistically less likely to receive offers at list price. Agents view concessions as a way to re-energize buyer interest and compete with fresher listings. However, with average days on market at 43-49 days in early 2026 according to current market data, this means the majority of listings are hitting this threshold—making concessions the norm rather than a competitive advantage.
Can a cash offer at 94% really net me more than a financed offer at full price?
Often, yes. When you factor in buyer concessions ($40,000-$60,000 for rate buydowns and closing credits), carrying costs during the extra 30-35 days to close ($4,000-$5,000), and potential repair credits from inspection, a financed offer at 100% of list price can net you less than a cash offer at 92-95%. The key is running the complete math including time value and risk, not just comparing the headline purchase price.
Do cash buyers really close in 7-14 days?
Yes, with proper documentation. According to cash closing analysis, cash transactions avoid the 20-30 days required for loan underwriting, processing, and approval. Title searches, escrow, and document preparation still take time, but the process typically completes in 7-14 days. Some buyers with prepared documentation and verified funds can close even faster if needed.
What if my home needs repairs—will cash buyers still make offers?
Many cash buyers, particularly investors and direct-purchase companies, buy homes as-is with no repair contingencies. This is especially valuable for sellers with older homes in coastal neighborhoods like Pacific Beach, Ocean Beach, and La Jolla where systems may be aged or cosmetic updates needed. You avoid negotiating repair credits that can easily reach $10,000-$20,000 with financed buyers who conduct thorough inspections.
Are concessions tax deductible for sellers?
No. Seller concessions are not tax deductible—they simply reduce your net proceeds from the sale. The IRS treats concessions as a reduction in sale price, not as a separate deductible expense. This is another reason why concessions are particularly costly: you pay them with after-tax dollars from your equity without receiving any tax benefit. Always consult with a tax professional regarding your specific situation.
How do I compare multiple offers with different concession requests?
Create a net proceeds spreadsheet for each offer including: purchase price minus buyer concessions (buydowns + closing credits) minus agent commission minus your closing costs minus estimated carrying costs based on days to close minus estimated repair credits from inspection. This "net-net" number is what actually matters. According to real estate transaction analysis, sellers who focus only on headline purchase price often choose inferior offers.
Can I negotiate with cash buyers, or are their offers take-it-or-leave-it?
Cash offers are negotiable just like financed offers. While some direct-purchase companies make firm offers, individual cash buyers and investors typically expect some back-and-forth negotiation. The difference is they're negotiating price and terms (like closing date), not asking you to pay their costs through concessions. Many sellers find this more straightforward than navigating complex concession packages with multiple moving parts.
What's happening with concessions in specific San Diego neighborhoods?
Concession rates vary by neighborhood based on price point and buyer demographics. North Park and South Park see high concession requests from first-time buyers stretching to qualify. Pacific Beach and Ocean Beach sellers face competition from builder incentives on new construction. La Jolla's luxury market sees the highest dollar-value concessions (often $60,000-$100,000) due to higher price points. Downtown condo sellers must compete with builder concessions offering $400-$700 monthly payment reductions. Point Loma maintains relatively lower concession rates due to limited supply and strong demand.
Making the Right Choice for Your Situation
There's no universal answer to whether you should offer concessions or pursue cash buyers. Your decision depends on your priorities:
Choose concessions if:
- • You have time to wait 45-60 days for the right buyer
- • You can afford carrying costs during extended marketing
- • Your home is in excellent condition with low repair risk
- • You're willing to navigate potential fall-through scenarios
- • Testing maximum market value is your primary goal
Choose cash offers if:
- • You need to close quickly (job relocation, avoiding dual payments)
- • Your home has deferred maintenance or may not appraise
- • You want to avoid inspection repair negotiations
- • Certainty matters more than extracting maximum price
- • You're in a timing-sensitive situation (foreclosure, divorce, estate)
Next Steps: Getting a Cash Offer
If you're curious whether a cash offer makes sense for your San Diego home, the process is straightforward:
- Request a cash offer estimate based on your home's location, size, and condition
- Compare the net proceeds to what you'd receive from a financed offer with typical concessions
- Consider timing and carrying costs in your analysis
- Make an informed decision based on complete financial and timing picture
With 60% of San Diego sellers now offering concessions, the question isn't whether you'll face pressure to pay buyer incentives—it's whether there's a better alternative. For many sellers, especially those in Pacific Beach, La Jolla, Point Loma, Ocean Beach, Downtown San Diego, North Park, and other neighborhoods where concessions have become standard, cash offers provide a compelling path forward.
Stop hemorrhaging money on rate buydowns and closing credits. Get a cash offer that eliminates all concessions while closing in 7-14 days—you might be surprised how the net proceeds compare to traditional sales in today's concession-heavy market.
Get Your No-Obligation Cash Offer Today
San Diego Fast Cash Home Buyer specializes in helping sellers avoid expensive concessions. No rate buydowns. No closing cost credits. No repair negotiations. Just a straightforward cash offer and a closing timeline that works for your situation.
Why Sellers Choose Us:
- • Close in 7-14 days with zero concessions required
- • No rate buydowns or closing cost credits
- • Fair cash offers with transparent pricing
- • No fees, no commissions, no hidden costs
- • Serving Pacific Beach, La Jolla, Point Loma, Ocean Beach, Downtown San Diego, and all San Diego County
Call (619) 777-1314 Today
or visit www.sd-cash-buyer.com to request your free cash offer.
Get Your Free Cash OfferEliminate concessions and close with certainty—get a cash offer that puts more money in your pocket without expensive rate buydowns or closing cost credits. Serving all San Diego neighborhoods, including Pacific Beach, La Jolla, Point Loma, Ocean Beach, Downtown San Diego, North Park, South Park, and throughout San Diego County.