I am a lender..... It doesn't matter who the lender is or who says there is a benchmark.
Conventional Mortgege: 3% of the sales price can be rebated back to the buyer in seller paid closing costs.
FHA/Other Gov't loans: Up to 6% of the sales price can be rebated back to the seller to cover closing costs.
These are called "Seller Concessions"
Unused seller concessions are kept by the seller. So your realtor needs to talk to your loan officer to set these numbers correctly..... Some realtors will try to set these numbers without consulting the loan officer and it can be a disaster.... You need a strong loan officer to protect you from the realor and seller on this issue.
Talk with your lender directly about this so you can convey this information to your Realtor before you structure your next purchase offer.
Tom makes a great point about ensuring that your Realtor and lender are communicating. I have been involved in a couple of deals this year where the Buyer has left money on the table because his Realtor overshot the mark in Seller contributions.
When I represent a Buyer who is going to ask for Seller contributions, I start talkng about this strategy with the lender early to make sure we are on the same page, and that whatever is requested by the Buyer can be fully applied to the loan.
For budget planning, Tom's numbers of 3% conventional/6% FHA have worked very well for my clients, but it is very important to pay attention to the details behind these percentages once the negotiation starts to make sure the full amount is realized.
Hope this discussion thread has been helpful.
Best confer with your mortgage broker who will provide instructions to your buyers agent.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
The amount varies by lender, however a good benchmark is $5000-6000. It must go toward actual closing costs or to buy down the mortgage rate. All of which needs to be reflected on the HUD-1 closing statement. You should have your Real Estate Agent contact your Buyers Lender to verify the maximum amount they allow, and decide if the amount they are asking is in line with the Lenders guidlines.
Best of Luck!
Typically the seller is allowed to pay up to 3% of the closing costs on an FHA loan. Depending on what type of loan you are deciding on and your down payment however this will vary. Also, there are grant programs out there where you can have the city or state assist you in your first time home purchase...
let me know if I can help or if you would like to speak with a preffered lender to get more help...