General Area in Krum>Question Details

Kristy, Home Buyer in Ponder, TX

is it common for the seller to pay for closing and pre pays on an fha loan in the dfw texas area?

Asked by Kristy, Ponder, TX Mon Jan 25, 2010

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The seller is not "required" to pay any of the buyer's closing costs. It is all negotiable and it happens frequently. It is just a matter of how much the owner is looking to net from the sale.

Naima
214-289-8555
Naima@Sumner-Realty.com
Web Reference: http://www.sumnerrealty.com
1 vote Thank Flag Link Tue Jan 26, 2010
Hello Kristy,

FHA allows a seller to pay up to 6% of the buyers closing cost and pre-paids. When it comes to a mortgage insurance premium, if there is any left of the 6%, they can pay all of it, but not a portion of it. I am not a mortgage broker, but these things I am sure of, I would not call it common, but is acceptable.

Your agent if you are a buyer should get all they can, the seller just has to agree. Your not really financing it in though if you are getting the house at a price for the same as you would have been paying without asking. Since you did not mention a price difference I felt that should be mentioned.
1 vote Thank Flag Link Mon Jan 25, 2010
It is very common. If you are looking in the Krum area, you may also qualify for a USDA loan, which requires zero down payment, and just like an FHA loan, you can ask the seller to pay your closing cost.
0 votes Thank Flag Link Mon Feb 4, 2013
Yes it is common, government loans limit what a buyer can pay for. However, don't expect a seller to drop their asking price and pay for the closing costs. If an owner has enough equity to both then it can be negotiated. I just sold a house in Denton and the seller agreed to pay for the closing costs on a FHA laon in order to make the sale, how ever the seller would not pay $3,000 for repairs as well. Almost everything in a real estate transaction is negotiable, so ask for what you want. Since real estate prices have come down, many owners are unwilling to drop their asking prices further.
0 votes Thank Flag Link Wed Jan 5, 2011
It can happen, but not sure it is common. It seems like this is also getting tougher to do because of the tight appraisal guidelines now. There still has to be enough room for the home to appraise.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Jan 26, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
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Depends on lender approval of amount of closing cost for seller to pay . Your mortgage broker should be able provide some guidance which instructs your buyers agent how to represent sales offer on your behalf.

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0 votes Thank Flag Link Mon Jan 25, 2010
As the previous answers mentioned, it is not at all uncommon to see a buyer request closing costs. While an FHA loan does allow the seller to contribute up to 6% of the buyer's closing costs, its usually rare that the costs would actually exceed 4.5%. One thing to take into consideration is the fact remains that the buyer must use at least 3.5% of their own money as a down payment regardless of the amount of closing costs.
Over the past couple of years, FHA loans have made quite the comeback and dominating the lender market. The attractiveness of these loans is it the 6% contribution allowance and the higher DTI (Debt-To-Income) Ratios that are permitted. It's important to note these advantages as most buyers looking for homes today will be approved via an FHA type of loan program.
With all good things comes the bad and then there are some of the disadvantages of choosing FHA financing including an upfront MIP that typically runs 2.25% of the home's price required at closing payable by the buyer as well as escrow reserves and so on. Those items alone will usually provoke an interest from the buyer to consider asking for the seller's help in order to help absorb some of that cost.
To wrap all this information into a nutshell would be to say that it is not only common for the seller to pay at least partial closing costs and pre-paids, in DFW, but it is customary just about nationwide.
Be sure to ask your Realtor to provide you with an Estimated Seller Proceeds Report reflecting a very worse case scenario of accepting an offer with the buyer requesting 6% in closing costs. Typically the seller costs will run higher than the buyers. I let my sellers know they should expect their closing costs on the home they sell to range from the most likely of 9% and to prepare for costs of up to as much as 12%. While numbers like that may give excuses to some home sellers to not use the services of a professional Realtor, there are an equal, if not more, amount of home sellers who regret trying to do it alone .
I hope this helped spread a little insight in to your question. If you 'd like to speak me about this or any other Real Estate related information, I'm just a phone call away.
Robert Regan
Web Reference: http://www.RKRegan.com
0 votes Thank Flag Link Mon Jan 25, 2010
Quite common for them to pay a %
I would consider it quite customary.

You should have a realtor in YOUR MARKET look and see what % that is.....

Now, you should know that you are really financing those costs since you would be able to get a lower price if they were't paying fees.

Let me know if you need a realtor in your local area. I can look and see if I know a good one there.
0 votes Thank Flag Link Mon Jan 25, 2010
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