Home Buying in 01545>Question Details

R, Other/Just Looking in 01545

if seller is saying instead of 650,000 to pay 370,000 and then asking to cover closing cost in shrewsbury,ma .is it wise to go through this.?

Asked by R, 01545 Fri Jul 9, 2010

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r

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Depends on your financing. If you are putting a small % down on the home there may restrictions on how much the seller can offer you in closing costs so check that out. The seller cares about the net so its just a numbers game for the buyer. Would you rather pay a higher price and essentially take a loan out on the closing costs (bc they are incl) or pay a lower price and have a smaller (albeit not by much) loan. Most people in this price point would rather pay the higher price since it wont change your monthly payments too much. There are so many costs associated with buying a home that people would rather save it for reno's / furniture / moving, etc. However, you need to make sure that higher number is current market value otherwise you could get a call after weeks of being under agreement saying your appraisal came in lower than your purchase price and that you cant get the loan.

Get a good buyer broker. It will save you a lot of time and money.
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0 votes Thank Flag Link Tue Sep 13, 2011
The seller should not care about YOUR closing costs ( unless they are talking about their closing costs... in which case you should not care ). A seller will look at the Net Number. i.e. $360K with $10K back will feel like $350K to them. There is a very small adjustment in tax stamps but we're talking like under $50 or so.

If you choose to include your closing costs you are essentially financing your closing costs to keep some more cash on hand. That decision is totally up to you. Make sure you are working with a good buyer agent that can give you some guidance.
0 votes Thank Flag Link Fri Sep 2, 2011
No

If you cant afford the closing costs, you cant afford the house. What are you going to do when the roof leaks next year and the cost is 10 grand to fix it ??

Not to mention the increased commission that you and the seller are losing and the increase in the valuation / subsequent property tax
0 votes Thank Flag Link Fri Sep 2, 2011
Hopefully you are working with a buyers agent and they can discuss with you the benefit or lack of benefoit to you for asking for closing costs. As Judy earlier stated usually the maximum allowed would be 6% and the money HAS to be used for closing costs, prepaids and escrows. Too get to $22,000 in closing costs would be ridiculous. Closing cost on a loan of that amontu should run $5000-$8000. Where does the additional money go if it is not used?
0 votes Thank Flag Link Mon Aug 15, 2011
Hi Again, R.

I think you may have meant to say "instead of $350,000 to pay $370,000...."

Either way, I think I can answer the question. Many buyers DO ask for the sellers to give them a credit back at closing to be applied towards closing costs and prepaid items (such as real estate taxes which are paid in advance). I believe the maximum allowable credit is 6% of the sale price (but PLEASE confirm with your lender).

Based on a purchase price of $370,000 that would be $22,200 so you, as the buyer, would reap the larger benefit. If you have a seller who is willing to agree on these terms, you just might want to go for it! Again, check with your lender first though!!!!

Good luck!

Judy Boyle
RE/MAX Signature Properties
Marlborough, MA
0 votes Thank Flag Link Fri Jul 9, 2010
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