The "Seller" (Homeowner) is sort of a figurehead; they will have be in the middle, signing and approving everything, but they are not the Negotiators, their Bank is.
The Bank is basically selling you their interest in that house, and the monies are coming out of their pockets.
If you can negotiate, (in your offer), for the Bank to pay all or part of the Closing Costs, then go for it.
But be realistic; you are probably going to have to inflate the offer by 3% to get them to accept the Closing Costs. The money has got to come from somewhere.
The advantage to you would be that you will put out less from your pocket.
It depends. It could be the seller, buyer or the bank. In most cases the seller has no money to pay for closing costs so the bank will usually pay for most of if not all closing costs. Sometimes the bank will ask the buyer to pay some costs and if the price is right for the buyer it may not be such a bad idea. Short sales unlike many foreclosures are many times in great condition because the home owner still lives in the house and is taking great care of it. Short sales can take some time to close and can weigh on a buyers patience but they can be a great choice for a savvy buyer. Dawn Lewis 619-981-3917
Closing cost are always negotiable. On shortsale transactions, since the lender is the ultimate seller they are the one who you need to negotiate, however in past couple of years that we have been mainly doing shortsales we rarely see a lender who is willing to pay for closing cost. You should ask your Real Estate agent to provide you the information about the seller contribution upfront to make sure it fits within your parameters. and Closing cost varies depending on the purcahse price, Title and Escrow Company and the lender you chose to work with.
In a traditional sale the closing costs can be negotiated through the contract process (for example, a buyer can ask in her offer for the seller to pay closing costs, or can make a slightly higher offer and ask for money to be credited back through escrow for closing costs).
In a short sale the seller typically has no money and therefore likely will not agree to pay closing costs. The bank, who is also losing money, normally will not pay for anything - closing costs, repairs, home warranty. But it is always worth a try. Speak with your agent and figure out the best way to present your offer so that the bank will not deny approval. The second suggestion above actually worked for a client of mine in a short sale to cover back HOA fees that the seller could not pay (the bank approved it).
Best of luck,
Rachel LaMar, J.D.
LaMar Real Estate, Inc.
You should definitely try and ask for closing costs from the seller (who is truly the bank). It is all part of the negotiation that your agent should be handling for you Let me know if you need any assistance & good luck!
McAllister Homes Real Estate
As a buyer's agent, I recommend to my buyers that we ask for closing costs.
ITS LWAYS WORTH A SHOT TO ASK FOR IT!!!
In most cases, since the bank is losing money on a short sale, they will not pay the buyers closing costs. However I have seen it done in some circumstances. The negotiator that the listing agent uses will try to get the costs covered but it ultimately is up to the bank. The banks have a net figure that they want to get and they will take all costs into consideration.
If you were buying a foreclosure you may have a better chance of getting your closing costs covered. The closing costs for a purchase that is financed can run from 2.5% to 4% depending on the purchase price, type of loan and the time of year the transaction closes.
The best thing to do is get fully approved by a reliable lender and have your agent write the offer in a manner that will benefit you the most. You must be prepared for the seller's bank to deny paying your closing costs and determine if you could proceed if they deny paying your costs. It can take several weeks to several months to hear back from the bank in a short sale.
Jerry Heard - Broker
CA DRE # 00648687
Think about it... A 200K offer with no closing costs paid by the bank is the same bottom line as a 210K offer with 10K closing costs paid. It is the same net 200K.
Get a good agent, and a good lender that will give you an idea of costs up front so that you know what your costs will be. Also work with your lender on the personal finance side of things to see what you want to put into the deal, and whatever difference there is, your agent will work with you to negotiate into the terms...
Good luck! Its a great time to buy, so hope you find a home that you love...
Let me know if I can help you in any way!
Joan Wilson (Realtor, SRES, Ecobroker, Certified REO and Short Sale/HAFA Specialist)
California Cool 4 Sale
Prudential California Realty
Direct Phone: 760-757-3468
License # 01341483
It is my Goal to Increase the Success and Profitability of Those I Serve
In California, when using a mortgage, standard settlement costs on any sales price will usually be at least $3.5 to $4k - escrow/title, lender fees, appraisal, 1st year of homeowners insurance (however the escrow account can be optional depending on the loan program and your down payment amount)... and they increase from there depending on the sales price/loan amount (since that affects how much escrow & title fees are, and to an extent how much a "point" on your mortgage would be, if you elect to buy down your interest rate) as well as if you choose to have an escrow account set up (adds many months of taxes & insurance you have to put down in reserves). On a $500k sales price it's quite possible to have $15k in settlement costs, depending on those variables I mentioned above.
Before you make an offer on a short sale, you should really get pre-approved, and part of that pre-approval process should be the loan officer going over what your total settlement costs are expected to be, what out of pocket costs you will likely have during the process and when those will occur, as well as what options the loan program allows for other parties (i.e. the seller's lender) to pay any of your costs.
With a Short Sale, there is no norm for closing costs as it is all negotiated with the bank. Once the offer has been approved by the bank, then the real negotiations start. What was negotiated with the seller can become inconsequential at that point. The terms of the sale are laid out in the Short Sale Approval Letter.
Once you have a copy of that letter, you will know what the bank expects of you and the seller.
We hope this helps. Feel free to ask any further questions.
Best to you,
Mark & Kari Shea
Shea Real Estate
Serving Greater San Diego