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LHGP947, Home Buyer in Dexter Place, College...

Is it acceptable to ask the seller to pay closing costs in today's market?

Asked by LHGP947, Dexter Place, College Station, TX Sat Feb 1, 2014

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Most sellers like "clean" offers. Asking for closing costs tends to make an offer not as competitive as others', especially if there are multiple offers already on the table. If you can afford not to ask for them, don't ,but if it boils down to it, then you must. Everything on an offer is negotiable so if someone tells you that it's a "no" its just not as black and white as that. It all depends on the seller.
2 votes Thank Flag Link Wed Mar 12, 2014
If you are in a seller's market there is no incentive for the seller to absorb your cost.
1 vote Thank Flag Link Wed Mar 12, 2014
In the Los Angeles area, I wouldn't suggest it. It's a seller's market here and most property priced homes have multiple offers on them.

If this is a matter of wanting to have a little extra cash on hand at the time you close on the property, you might want to consider offering a little more money and then asking for a credit back at the close.
1 vote Thank Flag Link Thu Mar 6, 2014
Theoretically, everything is negotiable. If you are in a strong seller's market where there are multiple offers, it would not be strategic to ask for closing costs. Doing so weakens your offer and will make seller's doubt your ability to close the deal.

Good luck.
1 vote Thank Flag Link Sat Feb 1, 2014
Perhaps in areas where the market remains a "buyer's market" this might be acceptable but in locations that have transitioned to a "seller's market" taking this position will likely decrease your chances for success substantially.

Your best advice on this will likely come from your local real estate professional.

Good luck,

Bill
0 votes Thank Flag Link Fri May 23, 2014
Some sellers don't mind to pay for buyer's closing costs if they don't have any better offers, why not?
We just closed FHA sale where all buyer's closing costs were paid by a seller(2%) and the rest by a lender. Buyer had to pay only 3.5% down to move into a house.
Good luck!
0 votes Thank Flag Link Fri May 23, 2014
Hello,

I think it depends where the property is and how much is the asking price. Right now its a seller's market and depending on your location, properties are selling fast. I think this would be a good question to ask your Realtor. He/She should be able to tell you if its a good idea or not. It is possible, infact I have a listing that went into escrow in 14 days. The buyers asked for $4,000 credit toward closing costs and my sellers accepted it.

For more information please check out my website: realestatebymariam.com
0 votes Thank Flag Link Thu Apr 24, 2014
There are many factors to consider when asking the seller to pay for closing costs. However, you can ask the seller to pay all or part of the closing costs. If the home will appraise for more than the asking price you can add the closing costs in with price of the home. If the seller has the property listed below market value then usually they won't pay any closing costs.
0 votes Thank Flag Link Thu Apr 3, 2014
Longing in Texas,
It depends on your purpose. If you like making offers asking for closing costs is a good way to write offers. More skill and insight will be needed to turn those offers into an accepting purchase contract.

What is incredibly important to a buyer and seller is understanding one of the major issues each must face.

This issue is 'the assurance of closing.'

For the buyer, this assurance means the money they spend on inspection, appraisal and even the cost of preparing to move or moving are not at risk. This often places their down payment at risk. If you lose too much money you can inadvertantly be removed from home buying eligibility. When a buyer presents a "Clear-to-Close' instead of a pre-approval, gigantic uncertainty is removed. Too often, everything goes well and Wells Fargo refuses the mortgage two days before closing. That is how you spell UNCERTAINTY.

For the seller removing uncertainty means they are not penalized by taking the home off the market (aging) and will not be penalized by indelible disclosure issues as the result of a failed purchase attempt.

As Kristin and Jill pointed out, it is hard to make a 'pay closing cost' request that does not increase uncertainty.

What can you couple to your 'pay closing cost' requirement that provides greater assurance to the seller? Options do exist, but you MUST make them clearly understood.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
0 votes Thank Flag Link Thu Apr 3, 2014
In revived markets, it would likely not be acceptable to most sellers since the seller's contribution toward closing expenses is closely tied to desperation and bad markets. The thing is, you can always ask......but be prepared to accept a negative response.

Good luck,

Bill
0 votes Thank Flag Link Thu Apr 3, 2014
I agree with Jill but it really depends on where you are Buying. In Los angeles that wouldn't fly because then it looks as if the perspective Buyer doesn't have enough money to close the deal and the Seller will go with another Buyer. It may work if you are offering on a property when there are no offers. If the Seller does agree it is Best to check with the lender that you are dealing with because that can be a red flag and jeopardize the loan.
0 votes Thank Flag Link Wed Apr 2, 2014
Lack of funds for closing costs is just one scenario. Sometimes a buyer has the money but simply prefers to finance their closing costs. Every situation is unique.
Flag Wed Apr 2, 2014
I'd structure the offer so that what you're really doing is financing your own closing costs, but not reducing the seller's net.

If your offer was going to be 500k and you wanted 15k in closing costs, you'd offer 515k. The potential issue with this approach is appraisal. If the property doesn't appraise for the contract price, it may kill the transaction, but there's also a good chance it may appraise and sail right through.

It would also be nice if your agent suggested that he or she not accept commission on the self-financed closing costs. It's a small detail that's a good will gesture and shows the seller you and your agent are motivated to make it work. Agents shouldn't be paid on closing costs anyway.
0 votes Thank Flag Link Wed Apr 2, 2014
Being that the market is so competitive in Los Angeles, I would say no.
0 votes Thank Flag Link Wed Apr 2, 2014
In this hot market the seller will not agree to pay the closing costs. If he had to choose between paying and not paying he will go with a buyer who will pay his own closing fees.
0 votes Thank Flag Link Wed Mar 12, 2014
Everything is negotiable. If you are worried about asking for seller help because the home is listed at a great price up the sale price to eat up the seller help you are asking for. Hope this helps and best of luck to you.
0 votes Thank Flag Link Wed Mar 12, 2014
I agree with James. Right now, in Los Angeles, you aren't going to get the sellers to go for it, unless they're overpricing their home. If that's the case, they might be thrilled to get any offer, and will gladly pay closing costs.

But in a multiple-offer situation, the extra $10k for closing costs will lose the deal for you.
0 votes Thank Flag Link Wed Mar 12, 2014
Yes, but it can depend on the real estate market of your location. A buyer's market will allow for a more negotiable atmosphere regarding closing costs. In a fast paced seller’s market where listings are receiving multiple offers, you will find it difficult to win the bid on a property if you’re asking for closing costs. Inquire with a Realtor applicable to your area.

Regards,
Chad Roberts
Broker/Salesperson
Realty One Group
0 votes Thank Flag Link Sun Feb 23, 2014
There is always room for negotiation. Some factors to take in to account are days on the market and if there are any other interested parties. The motivation level of the sellers will be the determining factor. It doesn't hurt to try and have them paid by the seller. If you are in competition with multiple offers, I always suggest your highest and best offer. I hope this helps.
0 votes Thank Flag Link Sun Feb 23, 2014
I try to find creative ways to put together the deal to get my clients' offers accepted.
Here in Los Angeles, there are a limited number of homes on the market.
Therefore, it is not typical to ask for Seller to pay closing costs.
However, there could be a circumstance where it is warranted, such as to offset other costs the buyer agrees to incur; e.g., anticipated repair or having to pitch in to make up the difference for a low appraisal.
Hope that helps! Dana Rose Saffron, Sotheby's
0 votes Thank Flag Link Sun Feb 23, 2014
Yes, it's very common for the sellers to make a contribution of up to 3% for your closing costs on an FHA mortgage.

When you want to buy a home the best place to start is to hire an Exclusive Buyer Agent. EBAs only work with homebuyers and there is never a conflict of interest that will jeopardize your negotiating position. Visit http://www.naeba.org for a referral to an Exclusive Buyer's Agent in your area.

I've written a best selling book called Buying a Home: Don't Let Them Make a Monkey Out of You. It'll teach you how to buy a home without getting ripped off. Follow the link below.

Best of luck!

Alysse Musgrave
214-734-3863
Alysse@HelpUBuyAmerica.com
http://www.helpubuyamerica.com
0 votes Thank Flag Link Sat Feb 1, 2014
You'll want to have an agent in College Station, Texas - or wherever you're hoping to buy - weigh in with the answer to this question. I see all the shows on HGTV etc where buyers ask for closing costs and that's just not done in my market. Some credit may be negotiated after the inspection but we almost never see that request in an offer. You're thinking along the right track - if the market is more competitve - more of a sellers market - it's less likely that that request would fly I would think.
0 votes Thank Flag Link Sat Feb 1, 2014
It is, however you can not beat them up on price and still expect them to pay your closing costs. This is where a good buyer broker comes in to lket you know what the house is worth in todays market so you can make the best offer with the best chances of getting it accepted.
0 votes Thank Flag Link Sat Feb 1, 2014
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