Your question is directed at? Are you looking to have the seller pay your closing costs for you?
There are closing costs associated with both sides of a transaction, This has been a much talked about thing to do when buyers make an offer having the seller pay the buyers closing costs.
I find that asking for closing costs usually does not work. It really is just a way for a buyer to make a lower offer.
Seller, unless they are offering closing costs as an incentive to sell their home, usually balk at this when presented.with an offer and paying the buyers costs.
As Guy mentioned, the transaction costs are somewhat divided on the standard Texas contract form. However, there is also a line in the contract that allows the Seller to contribute to the Buyers closing costs, picking up more of the tab than is specified in the contract. Lenders usually limit the amount that a Seller can contribute to Buyer closing costs (generally 3% of purchase price in a conventional loan, up to 6% in an FHA contract).
Hope this helps.
Your agent should be able to readily answer your questions.
EXAMPLE: PRICE OF HOME SELLING : $100,000
I FIND OUT WHAT SELLER OWES ON IT.
I THEN FIND OUT WHAT HE IS ACTUALLY WALKING AWAY WITH ( VERY IMPORTANT)
SAY HE OWES 62K. IN THIS EXAMPLE - USING 8% SELLERS CLOSING COST = 8K.
* NEXT I CALCULATE APROX WHAT HE WILL BE WALKING AWAY WITH IF I PAY HIM 100K
* THIS COMES OUT TO 30,000
THE BAIT AND SWITCH: OFFER: AS BUYER - I WILL PAY YOU 85,000 FOR YOUR HOME - BUT I "INSIST" ON PAYING EVERY CENT OF ALL CLOSING COSTS FOR YOU.
* CALCULATED: 85,000 TO SELLER, LESS HIS NOTE = 23,000 WALK AWAY
* CALCULATED: 85,000 OFFER ACCEPTED, BUYER ( ME ) WILL PAY TOP END 11% TOTAL CLOSING COSTS ( THATS SELLERS AND BUYERS APROX. CLOSING COSTS COMBINED). THIS MEANS
85,000 + 9,350, = 94,350. I GET THE PROPERTY FOR 5,650 LESS THAN ORIGINAL ASKING PRICE OUT OF MY POCKET.
QUESTION OF YOUR MILLINIUM: WHATS THE CATCH AND ADVANTAGE?
1) SELLER IS WALKING AWAY WITH 7,000 LESS THAN HE WOULD OF AT ORIGINAL 100,000 ASK IF HE PAID HIS CLOSING COSTS. HOW MANY DEALS ARE WALKED AWAY WITH A "NO" OVER 7K ? NOT VERY MANY!
2) BUYER ( ME ) IS SMILING. WHILE BOTH THE BROKER AND SELLER ARE ITCHING TO KNOW WHY I INSIST PAYING FOR SELLERS CLOSING COST........I SHOW THEM THIS:
ADVANTAGE TO ME ( THE BUYER).....THE SALE PRICE IS 85,000. CLOSING COSTS ARE NOT INCLUDED IN SALES PRICE OR PROPERTY TAX EVALUATION....EVEN THOUGH IM PAYING
TOTAL OF 94,250. THIS 94,250 WILL NOT SHOW UP ON THE TAX FORM.......85,000 WILL. THIS, ALONG WITH THE FACT THAT I SAVED 5650 ON THE DEAL....SET UP A LOWERING/PROTEST TO THE CURB SIDE TAX MAN......AND LAUGHING OUT LOUD.
ADVANTAGE TO SELLER: HE GETS HIS WALK AWAY MONEY VERY CLOSE TO WHAT HE WOULD OF IF HE PAID HIS CLOSING COSTS. HIS SALES TAX IS 85,000....NOT 100,000....AND THE SALES TAX HE PAYS DOES NOT INCLUDE CLOSING COSTS. YOU BREAK IT DOWN TO HIM LIKE THIS ..." ARE YOU GOING TO SAY "NO" OVER 7 K WHEN IM LOWERING YOUR SALES TAX ?
NOTE: NOT ALOUD WITH VA LOANS....ONLY CONVENTIONAL.
YOU WILL NOT FIND THIS IN ANY BOOK......99% OF REALTORS DON'T HAVE A CLUE.....AND ARE VERY PERSISTANT TO WHY A 'BUYER' INSISTS ON PAYING ALL FEES ON BOTH SIDES. WHO GETS UPSET: THE AGENTS ON BOTH SIDES "UNLESS" THEY AGREE TO SPLIT BETWEEN THEM 50/50 COMMISSION.
EVERYONE INVOLVED WINS....A WIN-WIN FOR ALL PARTIES IF THE AGENTS AGREE TO SPLIT COMM.
I INVENTED THIS....USE IT EVERY TIME. 100% LEGAL. EXPECT YOUR SELLER TO STAY UP AT NIGHT TRYING TO FIGURE OUT WHY YOU INSIST ON THIS. IT'S ALWAYS A FUN EXPERIENCE WHEN I BUY.
THE LARGER THE INITIAL BID....THE FUNNIER IT GETS BECAUSE YOU DECREASE EVEN MORE - SAME CALCULATING.
There are costs that are shared in a typical real estate transaction. IE: the seller typically pays for the owners policy and if a Survey is not available for the purchase the buyer typically pays for that. Other costs are split between the buyer and the seller.
If you are talking about the closing costs for your loan those are the buyer's costs but many buyer's prefer to roll some of them in and will present an offer to the seller with a fixed amount of funds going towards the closing costs for your loan.
When you make an offer with seller credits you need to typically increase your offer to account for these costs.
Good luck to you with your home purchase.
If you shift costs to the seller..... then the seller will demand more for the home.
Cash poor borrowers will ask for seller to pay more costs and finance those costs with a higher sales price....over 30yrs. In other words, you pay those costs over and over again by financing them.
Cash rich borrower will pay their share of the costs.
Smart buyer who understands how money works will look at both options. Then decide whether to take money out of a market that can earn 7% or more and sink it into a loan costing 4% or so.
So.... your answer is..... Which borrower are you?
Title company has work on behalf of both parties to complete the sales transaction.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
When neg. a deal the buyer can ask for additional closing costs to help with the purchase.
We've never heard of Buyer paying for Sellers closing costs in NJ However it's often Seller who offers to help with buyers costs. not always but often.
All the Best
DAve & Lisa