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Leslie.n.bunt, Home Buyer in Huntsville, AL

How common is it for a seller to pay the closing costs? It happens often on house hunting TV shows, but how realistic is that for Huntsville?

Asked by Leslie.n.bunt, Huntsville, AL Sat Apr 28, 2012

I have been saving money to go towards a down payment on my first home. How much will closing costs be on a house around $105k? I'm afraid I will have to borrow from my 401k if I have to pay the closing costs and I do not want to touch my retirement fund. Most buyers on the house hunting TV shows ask for the seller to pay closing costs when they submit their offer. It seems to work for them, but how common is that in Huntsville? If I'm worried about my ability to pay closing costs, should I postpone my house hunt while I save more money?

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Seller paying closing costs depends on the real estate market you are working with. When there is more supply of houses than buyers the sellers tend to offer Buyers Closing Cost (BCC) credit in order to make a sale. When there are fewer houses available with many ready buyers sellers are less inclined to pay the BCC.
0 votes Thank Flag Link Wed Oct 8, 2014
It depends on your offer in relation to the list price and how motivated the sellers are. I can tell you with all the loans I do in Huntsville that over 90% of my buyers generally bring just their down payment to the table because the seller or builder pays the closing costs.
0 votes Thank Flag Link Mon Oct 6, 2014
Many times the seller pays the closing costs in my experience.
0 votes Thank Flag Link Sat Aug 16, 2014
Seller paying a portion of or all the closing cost is fairly common in the Huntsville/Madison County and surrounding area. If a person is considering purchasing a home, now is the time. Interest rates are lower than rates were at the time I started in business in 1965. You need to stop watching the TV shows. This is the real world, not fantasy land. If you need help and not working with a Broker/Agent, call me, Jim Brown Brown Realty//256-539-0246. We are a member of the local Realtor Association and the MLS. We may not be better but we do take a personal interest in our customers whether they be sellers or buyers.
0 votes Thank Flag Link Wed Jul 17, 2013
First let me congratulate you on taking the first step towards buying your new home. I'm assuming from your question this may be your first home purchase. I noticed you did not mention any down payment requirement just closing costs. The following you may want to consider.

1. Obtain the services of a buyer’s agent. An agent who works for your best interest.
2. Ask your buyer’s agent to help determine what closing costs you may want to include in your offer to purchase.
3. Ask your buyer’s agent to help you understand the different types of financing options which might be available to you. VA, FHA, Conventional, Short sale, Foreclosure, There are different closing costs with different types of financing options. FHA has different type of financing you may qualify.

Hope this helps

DISCLAIMER: Information provided in this question is for informational purposes only.
0 votes Thank Flag Link Tue Oct 2, 2012
It is a decision between buyer and seller but not unexpected by the seller (in this price range) to have a request for closing assistance in the sales contract. In general closing cost will run apx 4% of the sales price...just a quick rule of thumb but it might give you an idea of what to expect. When you find that great house your Realtor will give you an estimated closing statement with more specifics about the closing cost. He or she can also help you negotiate the contract to include closing assistance if you so desire.

Good Luck. If you need help with the home search and offer process please give me a call. i will be happy to help you navigate the buying and selling process.
0 votes Thank Flag Link Tue Oct 2, 2012
This is totally up to the seller and the buyer. It's not written in stone who pays closing, its part of the agreement.
0 votes Thank Flag Link Tue Oct 2, 2012
It is very common that the seller will pay (or help pay) the closing costs. However, these things can always be negotiated between the buying and selling parties.
Congratulations on getting ready to purchase your first home. I wish you the best of luck.

Isiah Youngblood, Realtor®
RealtySouth - Trussville, AL
iy1776@hotmail.com
205.994.4592
0 votes Thank Flag Link Sun Apr 29, 2012
Is very common for the seller to contribute toward the buyer's closing costs and pre-paids. Its good that you see that most of the house shows are not always that realistic. For an FHA mortgage, the maximum seller contribution is 6% of the sales price. An FHA mortgage will require a 3.5% down payment. For a conventional mortgage above 80% LTV, the max will be 3%.

In you are purchasing in a USDA eligible area, then USDA offers 100% financing. They will allow upto 6% in seller contributions. Additionally, with a USDA mortgage, you can finance in closing costs and pre-paids up to 100% of the appraised value. If the sales price is $100K and the appraised value is $102K, then you can finance in $2K of closing costs/pre-paids.

I have an FHA 203K Renovation loan closing in Decatur tomorrow where the seller paid 100% of the buyer's closing costs/pre-paids. The buyer is only paying his 3.5% down payment. It will be up to your real estate agent to negotiate for the seller to pay those items for you though. Very often, you will need to increase your sales price some to get the seller contributions you want/need. The seller is really just concerned with their bottom line.

To get Pre-Qualified to see what your options are, my contact info is listed below.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Sun Apr 29, 2012
In Huntsville the seller pays part or all of closing about 70% of the time but part of closing is more common than all. Set a specific amount of closing assistance to be paid by the seller (example seller to pay $3500 in closing assistance) when the offer is extended. First time home-buyers and those under 150K should expect to get a favorable response on closing assistance - one of your other responses gave the rule of thumb number - closing runs about 4%, cash sales is lower.
Let me know if I can help you in any way.
0 votes Thank Flag Link Sun Apr 29, 2012
Wow it appears there are several answers to your question already. First let me congratulate you on taking the first step in buying your first home. You’re wise in asking a local real estate professional this question. Whether or not the seller is willing to pay all or part of the buyers closing costs is dependent on the market and the seller’s willingness. Sales price you agree upon is also a factor as the seller may not have enough equity to pay all closing costs. There are other details, which make it necessary your offer to purchase is correctly prepared. Here is my recommendation. I would love to set down and help you understand the total concept of buying your next or first home. Give me a call so we can set up an appointment, for interview. You can request an appointment via my website call 256-277-3445 256-27SELL4. I truly wish you luck.
Web Reference: http://JerryGearhart.com
0 votes Thank Flag Link Sun Apr 29, 2012
House Hunters is a good show, one of my favorites. I especially like the international edition.
My experience in the Huntsville market around the $105000 price point is that the seller typically pays most, if not all the negotiable closing costs.

Take these three real properties that recently sold for example

Property 1
Sold Date 4/27/2012
Sold Price $107000
Closing cost paid by seller $3210 (3%)

Property 2
Sold Date 4/26/2012
Sold Price $106000
Closing Cost paid by seller $2826.40(2%)

Property 3
Sold Date 4/26/2012
Sold Price $100000
Closing Cost paid by seller $4000(4%)

3% of the selling price is a fair estimate as to what the seller will pay in closing costs. Feel free to give me a call at 256-665-3778 and I will gladly provide you with a detailed estimate of how much you would need to have saved to buy the specific property in which you are interested.
0 votes Thank Flag Link Sat Apr 28, 2012
We are always able to get the closing cost paid by the seller. First time homebuyers really need that help. Closing cost is typically 3%. Give us a call if we can help Lowrey Team 256-990-7653.
0 votes Thank Flag Link Sat Apr 28, 2012
In Huntsville's current market for a house priced about 100K, it's common to expect a seller to contibute an amount, if not all towards a purchaser's closing costs, pre-paids, and escrow deposits or total settlement costs to help in their acquisition of the home.
0 votes Thank Flag Link Sat Apr 28, 2012
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