Home Buying in Chicago>Question Details

Maryjaew, Home Buyer in Chicago, IL

Who pays for closing costs?

Asked by Maryjaew, Chicago, IL Sat Nov 10, 2012

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It looks like you are a buyer, right? Well when you the buyer apply for your loan, your loan officer/lender will give you an estimate of your loan costs, then you need to add your attorney fees, insurance etc.
but if you are working with a Realtor that Realtor can put some numbers together for you, but remember none of the numbers will be 100 % correct until a day or so before the closing when the
title company puts them all together, furthermore, the contract you signed may make some differences as well, which we here do not know about.

So either discuss with your buyers agent, or contact a real estate attorney for you protection at the
closing table, a few 100 dollars spent now are worth getting a surprise down the road...

Good Luck to you
Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert

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1 vote Thank Flag Link Sun Nov 11, 2012
Typically both Buyer and Seller have closing costs that they pay for. A Buyer may include in their offer to purchase an amount that they want the Seller to pay towards closing costs which if the offer is signed becomes part of the contract. You should speak with your mortgage lender so that you may tell your Realtor what the lender has said is the maximum amount you may ask for.

Bear in mind there is no free lunch. Every Seller has a true bottom line and whatever you request in closing cost assistance is factored in. Here's an example: A home is listed for $250,000. The Seller is willing to accept $240,000 as their bottom line. You request $4000 in closing costs, The contract ends up being written at $244,000.

The advantage to the buyer is that it saves them $4000 up front and allows this to be rolled into their mortgage where it's only costing them around $15 per month and leaves them with $4000 that they can spend up front for any work or appliances etc that they may need/want.

Good Luck and Happy House Hunting.
1 vote Thank Flag Link Sun Nov 11, 2012
As mentioned previously, ceratin costs are buyer responsibilities and certain costs are seller responsibilities. If you are obtaining a loan your loan officer should provide you with a good faith estimate that shows the approximate costs.
0 votes Thank Flag Link Mon Nov 12, 2012
You have your closings costs, the sellers has theirs. I would go over them with your agent.
Web Reference: http://Americorpre.com
0 votes Thank Flag Link Sun Nov 11, 2012
They buyer has more costs than the seller, but both sides share them.
0 votes Thank Flag Link Sun Nov 11, 2012
Great answer by Larry below! In my area and others an sure, the home must appraise at the higher number. The Buyer would be responsible if that occurred for the difference.
0 votes Thank Flag Link Sun Nov 11, 2012
Generally each side pays their own closing costs. Sometimes a buyer will stipulate in the contract that the seller pays all but it is very rare.
0 votes Thank Flag Link Sun Nov 11, 2012
Mary-

"Closing costs" is a term that applies to both seller and buyer. Each have their own in a traditional transaction. Of course, no transaction is "traditional". Certain costs are paid by the seller... such as title charges, survey, inspection, etc. but everything is subject to your contract. If you want a good estimate, contact an attorney that specializes in real estate or speak to an experienced real estate agent (always "google" their name to see if they have a criminal record... there are a few that are on Trulia FYI....so its always a good idea!.)

Good luck in your search!
0 votes Thank Flag Link Sat Nov 10, 2012
Hi, Mary. In a closing both Seller and Buyer have their share of closing costs. Commonly, first time buyers ask the seller to pay closing costs. Bear a few things in mind:

1. The buyer's lender will limit the amount of the credit the buyer can receive and that credit can be applied only to certain items on the HUD (the itemized list of costs)
2. If the credit is more than the actual costs, the buyer will only receive an amount equal to the costs
3. A seller often looks at their bottom line in determining whether to pay the buyer's costs. For example, if the seller wants $200,000 but the buyer wants $6,000 in closing costs, the seller will now ask for $206,000. Essentailly, the buyer will pay for the price of the property PLUS the closing costs.

I recommend if the buyer can afford to pay for his/her own costs, that they do so. But if the buyer risks being cash-poor after the closing, it's better to ask for the seller to pay them.

Hope that makes sense!
0 votes Thank Flag Link Sat Nov 10, 2012
The SELLER pays the Seller's Closing Costs,
The BUYER pays the Buyer's Closing Costs;
unless some agreement is reached for something different.
Talk to your Realtor.
0 votes Thank Flag Link Sat Nov 10, 2012
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