> ## Content Index > Fetch the complete content index at: https://truenorthboulder.com/llms.txt > Use this file to discover other available public pages before exploring further. # Seller Concessions vs a Price Reduction in Colorado - URL: https://truenorthboulder.com/guides/seller-buyer-agent-compensation-colorado/ - Published: 2026-08-05T14:00:00.000Z - Updated: 2026-08-05T14:05:41.000Z - Description: A concession and a payment to the buyer's brokerage are two separate lines on the Colorado contract, and the form says each is in addition to the other. A price reduction is a third thing again, and the only one of the three that no lender can touch. - Author: Daniel Hsieh - Tags: Seller Guide, Selling, Colorado Law Most sellers arrive with one question: do I have to pay the buyer's agent now? The Colorado contract does not answer it with a single lever. **It gives you three, and it keeps them deliberately apart.** Which one ends up in the deal changes the price a given buyer can write. The listing contract makes the underlying point in its own capitals: **"COMPENSATION CHARGED BY BROKERAGE FIRMS IS NOT SET BY LAW AND IS FULLY NEGOTIABLE."** Everything below is about structure, not about a number. ![Branded infographic: three stacked Colorado contract instruments — CBS1 §4.2 seller concession, CBS1 §29 payment to the buyer’s brokerage, and a price reduction — joined by ‘stacks with’ connectors to show they add rather than substitute, above a stepped ladder of conventional concession ceilings at 3, 6 and 9 percent by combined loan-to-value, crossed by a movable second ceiling set by the buyer’s own closing costs.](https://storage.ghost.io/c/7c/ec/7cec6ddd-8aeb-4e8c-923a-e353e04b082d/content/images/2026/08/seller-buyer-agent-compensation-colorado-infographic.png) Three separate instruments, and the Colorado contract says they add rather than substitute. **(1) Seller concession, CBS1 §4.2** — a credit to the buyer at closing, “in addition to any sum Seller has agreed to pay or credit Buyer elsewhere in this Contract”; capped by the buyer’s lender. **(2) Payment to the buyer’s brokerage, CBS1 §29** — three routes on the page, and what the seller pays is “in addition to any other amounts Seller is paying on behalf of Buyer”; whether it counts against the concession cap is a question for the buyer’s lender, not one we will answer for you. **(3) Price reduction** — in neither section, because it is not a credit; no lender rule reaches it, and it lowers what the appraisal has to support, though it discounts the house for every buyer including the one who did not need the help. The conventional concession ceiling, on a primary residence or second home, is banded by combined loan-to-value: **3% above 90% CLTV** (roughly under 10% down), **6% from 75.01% to 90%** (roughly 10–25% down), and **9% at 75% or less** (roughly 25% down or more), calculated on the lower of the sales price or the appraised value. A second, independent ceiling applies as well: the concession cannot exceed the buyer’s own closing costs. Whichever binds first, binds — and neither is knowable until an offer exists, which is why the frame is a listing decision and the number is an offer decision. CREC Contract to Buy and Sell Real Estate (Residential), CBS1, mandatory for use on or after 2026-01-01; section numbers change with each annual revision. Bands and basis: Fannie Mae Selling Guide B3-4.1-02 (05/07/2025) — investment purchases cap at 2% at all LTVs. Brokerage compensation is not set by law and is fully negotiable. ## Three instruments, and the form says they stack **The first is a seller concession.** The Contract to Buy and Sell, in the version mandatory from January 2026, carries it at §4.2: a credit to the buyer at closing, usable for *"any Buyer fee, cost, charge or expenditure to the extent the amount is allowed by the Buyer's lender."* In practice, closing costs, points, origination, prepaids. The form itself does not enumerate. **The second is a payment to the buyer's brokerage**, and it lives a long way from §4.2, down at §29, with three routes on the page: by the seller, by the buyer under their own agreement with their broker, or by an agreement between the two brokerage firms. **The third is a price reduction**, which appears in neither section, because it is not a credit. It is the number at the top of the page. The form's own language settles it. The concession provision says the credit is *"in addition to any sum Seller has agreed to pay or credit Buyer elsewhere in this Contract."* The buyer's-brokerage provision says what the seller pays under it is *"in addition to any other amounts Seller is paying on behalf of Buyer elsewhere in this Contract."* A third provision, on FHA and VA seller-paid costs, states that amount *"does not include any compensation to be paid to Buyer's brokerage firm."* **Three times, in three places, the form refuses to let these collapse into one number. They stack. They do not substitute.** That matters for a reason that has nothing to do with paperwork. **If nobody covers the buyer's brokerage fee, the buyer covers it in cash, at closing, and it is not money a lender adds to the loan.** It comes out of the same funds they were going to close with. That is why the instrument changes the price a given buyer can write. ## Only one of the three is beyond a lender's reach A price reduction has no cap. No lender caps it, and it lowers the number the appraisal has to support. It also discounts the house for every buyer, including the one who did not need the help, and it is the number that goes on the record. A concession is aimed at one buyer's costs. A concession is different, because it is financed. On a conventional loan for a primary residence or second home, the cap is **banded by loan-to-value** (combined, where there is a second lien), not flat: **3%** above 90%, **6%** from 75.01% to 90%, and **9%** at 75% or less, calculated on *"the lower of the sales price or appraised value."* An investment purchase is capped at 2% regardless. **That band is the practical fact.** A buyer putting 5% down can absorb a third of what a buyer putting 25% down can. The same concession, offered to two different buyers, is two different instruments. If the buyer you want is the one stretching to get in, the ceiling is lowest exactly where you were hoping it would be highest. **And there is a second cap that gets far less attention.** Financing concessions *"must be equal to or less than the sum of the borrower's closing costs. Any amount exceeding the borrower's closing costs must be treated as a sales concession."* In our price band the loan-to-value band is almost always the operative one; the closing-cost ceiling shows up on smaller loans. A concession can pay a buyer's costs. **It cannot hand them money.** Exceed either and the excess *"must be deducted from the property's sales price"* with the loan-to-value recalculated. **A full-price offer carrying a large concession is an under-price deal wearing a full-price hat, and the appraisal is still done at the contract price.** **Neither number is knowable when you list.** You cannot see a hypothetical buyer's loan-to-value or their closing costs. Both are knowable the moment an offer arrives, which is when they get checked. So the instruction is short: **before you agree to a concession, the buyer's lender confirms in writing that the full amount is usable on that loan.** Verbally, relayed through the buyer's agent, is not that. A cash buyer has no lender and no cap, so none of it binds them. **One more thing these caps do that nobody warns sellers about.** An inspection credit is a financing concession too, and it draws on the same ceiling. Agree to a closing-cost concession in the contract and you may have no room left when the inspection objection arrives, at which point the choice narrows to doing the repair or cutting the price. Two things we're not going to tell you **We will not print a rate or a range.** Broker compensation is not set by law, it is negotiated per transaction, and any figure you read on a national site is a description of someone else's market. A published "typical" number is not information; it is a suggestion, and it is not one we are willing to make. **And we will not tell you whether a seller-paid buyer-broker fee counts against the concession cap.** It is no longer a named exclusion. The current list is short and specific and does not name commissions, leaving the answer to rest on the Selling Guide's general "common and customary" sentence rather than a stated rule. **Do not assume the old answer still holds.** That is a question for the buyer's lender, on the buyer's specific loan, before anyone writes it into a contract. You cannot ask that lender yourself; your broker asks, through the buyer's broker, in writing. ## Where it gets papered, and whether your own fee moves The listing contract gives two routes, and they differ in a way that shows up on your settlement statement. Under the first, your brokerage firm *"may enter into a compensation agreement with buyer's brokerage firm *to contribute from the Sale Compensation*"* an amount stated in the listing contract. Your fee is **not** reduced, though the money still comes out of compensation you already negotiated. The same document puts that expense on the brokerage, which *"must bear all expenses… to compensate buyer's brokerage firms."* Under the second, if **you** agree to pay the buyer's firm through the purchase contract, *"Seller's compensation to Seller's Brokerage Firm *will be reduced by that amount*."* **Read this part slowly: that second route is capped at the figure written into the first.** The number you put in the listing contract is not a starting point. It is a ceiling on what you can route through the purchase contract later, and moving it mid-deal means amending the listing contract. A small figure, or a blank, is not neutrality. It is a limit you set on yourself before any buyer existed. At the listing table this is one question in your own words: *if a buyer's broker gets paid, does that come out of what I already agreed to pay you, or is it on top of it?* Your listing broker is also required to disclose any payment that will be made to another broker, to you, in writing, in advance of any payment or agreement to pay, and the disclosure must *"specify the amount or rate."* Ask for it in that form. One note on vocabulary, since the old words are still everywhere. The form's term is *"contribute from the Sale Compensation."* It is not a split, not a share, and not a co-op, and that language was gone from the listing contract well before the current version. ## You can say a concession exists. You cannot say what it is. Our MLS prohibits offers of compensation through the service outright, and prohibits reporting negotiated commission at all. Concessions are treated more permissively, but not as permissively as you would expect. A concession may appear in **Public Remarks**, or in Public and Broker Remarks together, and *"not permitted in any other data fields."* It must be **general**. The MLS's own guidance is unambiguous: **no specific financial information in dollars or percent may be communicated.** So *"seller will consider concessions"* and *"seller offering rate buydown"* are fine. A dollar figure is not. And a concession *"limited to or conditioned on the retention of or payment to any other brokerage"* is prohibited in any field, photo or attachment. **There is also no dedicated concession field on the listing side here**, so national how-to instructions that describe filling in a number do not transfer. **And do not assume a concession is invisible afterwards.** The display rule and the record-keeping duty are different obligations, and our MLS has published that recording seller-to-buyer concessions is a mandatory part of closing a listing out. **What a shopper sees on the live listing is not what the appraiser or the next comparative market analysis sees after closing.** Common questions ## Frequently asked Is a seller concession the same as paying the buyer's agent in Colorado?+ No. The Contract to Buy and Sell keeps them on separate lines and says so. The Seller Concession provision states the credit is in addition to any sum the seller has agreed to pay or credit the buyer elsewhere in the contract, and the buyer's-brokerage-compensation provision states that what the seller pays under it is in addition to any other amounts the seller is paying on the buyer's behalf. They stack rather than substitute. Broker compensation is not set by law and is fully negotiable. Is there a limit on a seller concession?+ On a conventional financed purchase of a primary residence or second home, yes, and there are two. Financing concessions are capped by loan-to-value: 3% above 90%, 6% from 75.01% to 90%, and 9% at 75% or less, calculated on the lower of the sales price or the appraised value. An investment purchase is capped at 2% regardless. Separately, financing concessions must be equal to or less than the buyer's own closing costs. Other loan programs run on their own rules, and VA does not treat a seller's payment of buyer-broker charges as a concession at all. The buyer's lender governs; the contract itself says a concession may be used only to the extent the amount is allowed by that lender. Does a concession or a price cut hurt my net more?+ They are close on your net sheet, not identical. If your listing compensation is stated as a percentage, a price reduction shrinks the base that percentage is calculated on and a concession does not, so a dollar of concession costs you a full dollar and a dollar of price cut costs slightly less. That is a net-sheet conversation with your broker. The larger difference is on the buyer's side: a concession pays their closing costs and is capped by their lender and by the size of those costs, while a price reduction has no cap and lowers the number the appraisal has to support. Can I advertise a concession on the MLS?+ You can say one exists. You cannot say what it is. IRES permits seller concessions in the Public Remarks field, or Public and Broker Remarks together, and nowhere else, and requires that they be general: for example, that a seller will consider concessions or is offering a rate buydown. IRES's own guidance states that no specific financial information in dollars or percent may be communicated, and a concession conditioned on payment to another brokerage is prohibited outright. Will a concession show up in the comparable sales later?+ Treat the two as separate questions. What a shopper sees on the live listing is limited by the display rules above. What happens after closing is a different obligation: IRES has published that recording seller-to-buyer concessions is a mandatory part of closing a listing out in the system. So do not assume a concession is invisible to the next appraiser or the next comparative market analysis. ## Set the frame at the listing table. Set the number at each offer. These are two decisions, and sellers keep collapsing them into one. **At the listing table you set the frame:** which of the two routes you are signing, what figure goes in that blank, and what your remarks will say. Those happen before any buyer exists, and the middle one quietly caps what you can do later. **At each offer you set the number**, against a real buyer with a real loan, because that is the first moment either ceiling is knowable and the last moment before it is typed into a contract. Then you do it again at inspection resolution, out of the same allowance. What that produces is not a number we pick for you. It is an understanding of which instrument fits the buyer you are most likely to attract, what their lender will permit, and which route you agreed to on day one. If you are getting ready to list in Boulder, Longmont, Lyons, Loveland or Berthoud, [tell us where you are in the process](https://truenorthboulder.com/contact/) and we will walk the three lines with you before anything is filled in. Our [move-up seller guide](https://truenorthboulder.com/guides/how-to-sell-a-move-up-home-boulder/) covers the rest of the sequence, and the [net-proceeds guide](https://truenorthboulder.com/guides/seller-net-proceeds-colorado/) covers what actually lands. For the same question from the other side of the table, the [buyer-agency guide](https://truenorthboulder.com/guides/buyer-agency-agreement-colorado/) has it. *True North Boulder is a real estate team with eXp Realty.* *Nothing here is legal, tax or lending advice. Contract terms are yours to negotiate with your broker, legal effect is an attorney's call, and what a specific loan permits is the buyer's lender's call.* Sources & data notes - Colorado Real Estate Commission: Contract to Buy and Sell Real Estate (Residential), CBS1, adopted 2025-08-05, mandatory for use on or after 2026-01-01\. The Seller Concession provision, the Buyer's Brokerage Firm Compensation provision and the loan-limitations provision quoted here. Exclusive Right-To-Sell Listing Contract, LC50, adopted 2025-10-07, mandatory 2026-01-01: the compensation and expense provisions, and the negotiability statement on its face. Both retrieved 2026-08-01\. Section numbering is re-issued with each annual form revision; verify against the current form. - IRES, LLC Rules and Regulations (revision list through 7/26): the prohibition on offers of compensation and on reporting commission, the seller-concession display rule and its general-language requirement, the seller-disclosure duty, and the own-listings display limit. Close-out recording of concessions per IRES member guidance on post-settlement policy changes (August 2024). Retrieved 2026-08-01. - Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions (topic dated 05/07/2025): the loan-to-value concession bands and the 2% investment-property limit, the closing-cost ceiling, and the lower-of-price-or-appraised-value calculation. Announcement SEL-2025-03 (2025-05-07) rewrote the exclusion list for note dates on and after 2025-09-03; real estate commissions are not among the named exclusions. - U.S. Department of Veterans Affairs Circular 26-24-14, effective 2024-08-10: buyer-broker charges are not treated as a seller concession, and the variance permitting Veterans to pay their own broker where an MLS prohibits compensation postings is temporary pending rulemaking. Confirm it is still in force before relying on it. - We have deliberately published no commission rate, percentage or range. The percentages above are lender concession limits and loan-to-value bands, not compensation figures. FHA and VA interested-party contribution percentages are not stated here because we could not confirm them at a primary source.