Home Buying in 46323>Question Details

Cwright, Home Buyer in 46323

How much should I ask the seller to pay towards my closing costs.?

Asked by Cwright, 46323 Thu Dec 11, 2008

I'm getting ready to put in an offer on a bank owned foreclosure. I'm offering the asking price of 44,900 for the home so how much should I look at asking the seller to pay towards my closing costs. What percentage of the purchase price would be normal?

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I tried to answer this earlier but my computer crashed just before I finished it.

As you probably know, most sellers of REO properties will require you to provide proof of funds for the amount of the purchase price along with your offer. So, if financing, you will need t be pre-approved with your lender before making an offer. The lender will provide you with a good faith estimate of your closing costs. Since you have indicated that you are making a full price offer, I would ask the seller to pay ALL of your closing costs (based on your good faith extimate). All the seller can do is say NO, Yes or make a counter offer. Give it a try... what have you got to lose.
0 votes Thank Flag Link Thu Dec 11, 2008
When writing an offer for my buyer clients, we usually ask for nearly all closing to be paid by the seller. Of course that depends on many factors such as List price vs our offer, how much money my client has in reserve, how many days on market, etc. In your situation and in my dealings with foreclosures in the past, I have found that if a person offers full price the bank generally pays all or most of the closing costs. The bank wants to get rid of the property as soon as possible.
0 votes Thank Flag Link Fri Dec 12, 2008
Thank you so much Mr. Wallinger. I have already been pre-approved for well over the amount that I am asking to borrow and I have gotten my good faith estimate which looks rediculiously high for the amount they are trying to charge for closing costs. Over $3000 JUST for closing costs, not including prepaids and my down payment.
I'm talking with another lender to see if they can offer me better. The first bank I tried working with was fine and estimated over $2400 less than the 2nd, but Im' no longer working with them since they said they won't cover a foreclosure.
I'll see what this new bank can do and if closign costs aren't too extreme I'll see if we should ask the seller to pay all.
Thanks again!
0 votes Thank Flag Link Fri Dec 12, 2008
In response to Erik, the lender that is funding my mortgage is not the same bank that is selling the home.

In response to Bill, I am making a full price offer. I am not going below the listing price so that I CAN ask them to pay a portion of my closing costs without any offense. My lender recomended that I ask for $1000 towards the closing AND lower my offer to $40,000, but I was not going to push my luck.

I told my realtor that I would ask for 3%, but was just wondering what others opinions were so that I could think about asking for more if possible.
0 votes Thank Flag Link Thu Dec 11, 2008
In this situation the "Seller" is the bank, and those fees that they put on a loan are fees that they are charging you for borrowing their money.

You want to borrow their money to buy their property, and want them to pay their own fees...you can see why they typically don't like to pay closing costs.

Buying a Bank Owned Property can be a very tricky endevour, even more so than a typical resiential sale, you should talk to your REALTOR about your concerns.
0 votes Thank Flag Link Thu Dec 11, 2008
You should check with your realtor and also with your lender. Typically people ask for 3% up to 6%. Since this is a bank owned property they may not be willing to pay any monies toward closing.
0 votes Thank Flag Link Thu Dec 11, 2008

This is a question best directed to your real estate professional that is assisting you through the "foreclosure" process. The reality is that not all banks will accept paying a portion of the closing costs.

Are you making a full price offer? If you are low balling the bank and asking them to contribute toward the closing you may be looking at a lost cause. What does your aget recommend?

Good luck
0 votes Thank Flag Link Thu Dec 11, 2008
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