1. Buyer is shopping above their price point..
2. Buyer is tapped out and negotiation can only go in one direction DOWN!
3. Buyer has very little money saved and may be marginally qualified for a mortgage.
4. A marginally qualified buyer is more likely to get denied a loan a week before closing.
5. The seller is likely to suffer the consequences related to the lender the buyer choose:
- Inspection (disclosure)
- Appraisal (durability based on type of financing)
- Appraisal, price beat down if big bank is involved AFTER making closing cost concession.
6. Buyer is being 'played' by their bank/lender to make the banks fees appear less or justified. This if often cloaked in the words 'lender requires' .... A seller should CHOOSE not to become a victim because the buyer choose the wrong lender.
There are more, but you get the point.
Such offers are viewed as less competitive for many reasons. The best option for a buyer is make a 'clean' purchase offer. Demonstrating the characteristics of a WEAK buyer will not prove beneficial in a sellers market.
Eric Axelson suggested a great alternative that reduces, not eliminate, the concerns a seller would have.
Unless of course the house is in bad shape or cannot sell for some reason.. sure there may be some incentive by sellers.
But in reality. Nah.. not happening too much.
Orange Key Realty
Go with an experienced agent. I have 22 years of experience and I am well versed in finance and am considered an expert in negotiating such a contract.
Your loan type will also be a factor in how much is allowed. For instance FHA as opposed to conventional type loans differ in what you can get back as closing costs from the seller. up to 3% and up to 6% ...
And then they cannot exceed the actual closing costs... if your closing costs are 5000 and seller allowed 6500 in closing costs... you would only get the 5000 the difference is given back to the seller...
The closings costs are not for everything either.... There are guidelines that dictate what are allowable closing costs.
When negotiating your purchase or even as a seller, this is where experience and knowledge of your real estate professional can help you get the most money and best price for the home.
If you have specific questions, you can contact me directly anytime 7 days
Search Short Sales and foreclosure Deals at http://www.BuyNjShortSales.com
Berkshire Hathaway HomeServices, Fox & Roach
As a Realtor, I find that its pretty much left up to the Sellers and How fast they want to move their property; although, ITS A SELLERS' MARKET NOW, BUT ITS GOING TO TIGHTEN UP FOR BUYERS PRETTY SOON....SO IF YOU'RE SITTING ON THE FENCE, YOU'D BETTER PURCHASE NOW BECAUSE..."TIME IS OF THE ESSENCE"!!
Coldwell Banker Residential Brokerage
32675 Temecula Parkway Suite A
Temecula, Ca 92591
951 878-9007 Cell
CalBRE # 01308721
That being said you should have strong trust in your REALTOR who not only will guide you and strongly negotiate on this matter but also on the other matters that are part of a real estate transaction.
JOAN LORBERBAUM MOORE
Broker Associate, GRI
9858 Clint Moore Road
Boca Raton, FL. 33496
In essence buyers are really borrowing the closing costs.
50% of the deals I do include seller concessions
If you are getting a conventional loan and putting down less than 10%, you can get back 3% of the sales price for closing costs. With more than a 10% down payment you can get back up to 6%. FHA loans are always 6%.
On both programs the max closing costs cannot exceed the actual closing costs. This means if your closing costs are $5000 then you cannot ask above this number.
If you are having the seller pay your closing costs then presumably the seller is taking a bit higher price than they would if they did not pay the closing costs. So you as the buyer are paying a bit more for the house than if you paid your own closing costs.
With the low cost of borrowing it makes sense for a lot of people to do this.
Contact me to talk more about the different packages you may be eligible and for some lender contacts.
Please call me if you need any further information.
For example, you and seller agree to a price of $300,000. You would like to "finance" closing costs of 3%. You would document sales price at $309,000. The seller net does not change.
I hope this helps!
R. Eric Axelson, Associate Broker
Licensed in NJ and PA
Kurfiss Sotheby's International Realty