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Trulia, Other/Just Looking in San Francisco, CA

Which costs are potentially negotiable in closing costs

Asked by Trulia, San Francisco, CA Sat Mar 3, 2012

Are there negotiable and non-negotiable closing costs?

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Ian Biggs’ answer
Most of the closing costs for a home purchase are not negotiable. The appraisal fee, escrow fee, etc. are set fees that need to get paid. What IS negotiable, however, is who pays for the closing costs. It is common place nowadays to ask the seller pay for some or all of a buyer's closing costs.
That being said, some lenders will negotiate with you on the origination fee (largest part of closing costs; typically 1% of the loan amount), but a smaller origination fee = higher interest rate.
1 vote Thank Flag Link Mon Mar 5, 2012
"Closing Costs" is a general term that lumps several fees into a bundle to describe the cost to buy or sell a home. A Good Faith Estimate would itemize each of the fees for the buyer.
Typical among the costs are Title, Escrow, Loan Origination, Recording, Appraisal, Wire Transfer, Credit Report, Flood Certification, Underwriting or Lender Acquisition Fee. The majority of these costs are dependent on the companies that provide them.
Title Company A will set their charges different for the same loan amount than Title Company B. You can shop these, and usually by combining Title & Escrow reduce the total a bit, but I've not seen them "negotiate" their structured fees.
Lender Origination is up to the loan officer and may be negotiable. The loan originator will be paid a fee either from the borrower or the providing lender's rebate that comes from delivering a slightly higher rate. Most of the other third party fees are fairly common and set by the company’s involved.
Pre-Paids, which are in addition to closing costs, are non-negotiable for the most part. These fees include your first year of Home Owners Insurance, setting up your property tax and insurance escrow accounts with 2-6 months of payments and the daily interest from when you close until the end of the month.
1 vote Thank Flag Link Sat Mar 3, 2012
Up to the limit your lender will allow. Your lender will have a dollar cap on the total credit you can receive from the seller. Often the seller can buy all of the buyer's closing costs, but you do it in lump sum. You don't "negotiate" each cost...you ask for a credit to pay the total costs. You need to know that $ amount and not simply say "all". And you need to know that your lender will allow that $ amount. Usually they will allow up to 3%...but no more than the actual costs.
1 vote Thank Flag Link Sat Mar 3, 2012
I could repeat what others have already said & more, but, bottom line, is the question is too vague to answer fully. I am both a loan officer & a real estate broker & the answers are not so simple.
0 votes Thank Flag Link Sat Mar 3, 2012
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