Home Buying in Asbury Park>Question Details

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How likely is it to have closing costs covered by the seller? I know this varies in different markets. Thanks! Tara

Asked by Voices Member, Fri Jul 27, 2012

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7
Tara,
It really depends on the property, how it's priced and how good the rest of the offer is. Ultimately it comes down to the "net" amount the seller will receive. An offer of $250,000 without paying the buyer's closing costs is the same as an offer of $255,000 with $5,000 toward the buyer's allowable closing costs (more or less depending on some minor details).
If the buyer is hoping to net $250,000 for their home there is no reason not to accept the offer.
One minor pet peeve, we call this the seller paying the buyer's closing costs. In reality it is the buyer "financing" the closing costs through an inflated price. As long as the buyer realizes this, I'm fine presenting this when the home may appraise and the seller seems motivated.
1 vote Thank Flag Link Fri Jul 27, 2012
It is not just your pet peeve, Dan, but the truth. Any agent who does not explain to the Buyers (and Sellers) that "Sellers Concessions" are actually buyers financing their own closing costs, are not doing their job.
Flag Thu Sep 5, 2013
Totally likely, if it's negotiated in your contract. Of course, sellers aren't going to want to do this unless your offer is very tempting.
0 votes Thank Flag Link Tue Jul 31, 2012
What has been said is accurate HOWEVER, please keep in mind that when you add closing costs to the offer price, the house MUST still appraise. If adding several thousands of dollars brings the price above what the bank appraiser says is fair market value, either the seller must be willing to lower his/her price or you must be able to purchase without adding the closing cost. This is exactly a situation I had recently with a contract. Fortunately, we were able to resolve it, but please be aware that this can and does happen. Wishing you the best!
Leni
973-207-9803
0 votes Thank Flag Link Fri Jul 27, 2012
This can also be referred to as a "seller's concession". An example: I have a buyer who wants to purchase a home for $300K with a $7K seller's concession (closing costs paid by seller). If the seller agrees, he walks with $293K at closing, and the buyer will pay $300K for the house over the term of the loan (usually 30 years), but comes to the table with little or no money depending whether the $7K covers all of his closing costs.
PS: Tara, I relocated from HOBOKEN to ASBURY PARK 12 years ago, and it was the best decision that I ever made!
Cynthia Meehan - Heritage House Sotheby's International Realty
0 votes Thank Flag Link Fri Jul 27, 2012
Tara, every aspect of the contract is negotiable to the extent the buyer and seller can agree upon. For a seller to agree to cover the closing costs, or any other costs that may be typical to the buyer, you would have to ask. The process is a negotiation to come to acceptable terms. Never be nervous about asking for better terms. The worse that can happen is the request is rejected. Minor requests are easy to accept and extreme ones may result in the loss of a deal. But everything should be weighed as to importance and an acceptable deal should be able to be made.
0 votes Thank Flag Link Fri Jul 27, 2012
Hi Tara,
How's everything going? You can put it in the intitial contract to see if the seller would accept. I have done it in the past. It all depends on the motivation of the seller, and if they have a lot of liquid cash. I hope this has been of a help. Thanks and have a great weekend.

Sincerely,
Peter G. Apicella
Realtor Associate
Prudential Zack Shore Properties
520 Washington Blvd.
Sea Girt, NJ 08750
732-915-2773
0 votes Thank Flag Link Fri Jul 27, 2012
It all depends greatly on the individual deal. Everything is negotiable in a real estate transaction, and of course everything depends on what a seller will net from the sale.
0 votes Thank Flag Link Fri Jul 27, 2012
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