Home Buying in Quincy>Question Details

kshah241, Home Buyer in Braintree, MA

is it common to have sellers pay for closing costs in mass?

Asked by kshah241, Braintree, MA Tue Jan 31, 2012

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Tom Matthews & Joanne Taranto’s answer
Home Buyer:

It has certainly become more common than it has been in the past. I would caution you that there are two sellers in the market right now. The seller that prices the home with room to negotiate and the seller that prices or under prices the home to sell. You should have your buyer's agent identify the audience that you are dealing with because you easily lose a deal asking for concessions. Best
0 votes Thank Flag Link Tue Feb 7, 2012
Yes, very common however it isn't something you should expect as it is a negotiable item. Also, be careful what type of financing you have. They may not allow for credits over a certain amount.


Good luck!
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0 votes Thank Flag Link Tue Jan 31, 2012
Nothing is common in real estate.

It really depends on many factors, 1st and most important is the home priced fairly and is there demand for it? 2 are there multi offers? 3 Are any or none of them asking for concessions like closing costs? 4 Would they sell for less without concessions? 5 Can you buy a home without concessions?

So as you can see it is not a simple yes or no answer.

In my market you have a better chance of winning the lottery.
0 votes Thank Flag Link Tue Jan 31, 2012
I would say for 25 to 50% of the deals closing there are a seller concession of sellers paying buyers pre-paids/closing costs and escrows. In today real estate market when you are dealing with FHA financing it is quite typical for a buyer to ask for closing costs back.

I just ran a report for Methuen MA and 25% of the closed deals in the past 6 months had seller paid closing costs.
0 votes Thank Flag Link Tue Jan 31, 2012
Hello - Yes, in this type of Buyer's market it is becoming more commonplace to ask the Seller to contribute to Closing Costs and Pre-paids for the Buyer. Before considering this strategy I would have my Buyer's agent do an analysis of the particular property you are interested in. 1st where is the pricing at ie...is it high, low, just right? Does the area support that pricing? Is it in a strong market area? There are a lot of variables to consider here and your professional Realtor should be able to help you with this. I say this because while getting the Seller to assist you with Closing Costs (Less upfront money for the Buyer) you have to make sure that the ultimate Purchase Price will be supported by the Bank Appraiser's analysis. This is important because the Seller assistance will be added to the ultimate Purchase Price. So, bottom line, yes this strategy can work but it should be considered carefully for each propety you are considering before submitting your Offer. Thanks.
0 votes Thank Flag Link Tue Jan 31, 2012
Yes, it does happen - not in every deal but it is something we see here regularly in Massachusetts. From a Seller's point of view, they just need to look at the bottom line - what is the net they will receive. For Buyers, I tell them the same thing - if you are asking for closing costs, remember to figure that in to the price as the Seller is looking at their net gain from the sale. I also remind buyers that if they do this then those costs are added in to their purchase price & they are essentially financing them so think about which is more financially advantageous.
Christine
0 votes Thank Flag Link Tue Jan 31, 2012
Dear prospective buyer:
Thank you for the question! There are two angles of looking at the seller's concession: it is common to request the seller(s) to assist the buyer(s) with the closing cost, and the seller's concession will help the buyer(s) on saving additional fund to use towards repair works of their property after passing papers. It will also help the buyer(s) to save some money in the short term. That being said, the buyer(s) will have to borrow additional amount in addition to their principal balance of the loan, and the long term payments plus interest rate would cost more to the buyer(s), especially the term of the loan is fixed for 15 or 30 years. However, with the current interest rates are at historically low, there might not be a big of the effect in the long run.
Sincerely,
Calvin La
0 votes Thank Flag Link Tue Jan 31, 2012
There is nothing set but it's more of a buyers market so I am seeing more buyers getting some portion of their closing costs covered.
0 votes Thank Flag Link Tue Jan 31, 2012
Many buyers do ask sellers to cover some closing costs for the buyer, typically this is up to 3% of the purchase price. As a buyer if you were to ask for $5000 back to cover your closing costs your offer would need to reflect the increase of that $5000. Additionally the home would need to appraise for the higher price (offer price + $5000). The buyer is actually rolling the closing costs into their mortgage.
0 votes Thank Flag Link Tue Jan 31, 2012
It varies, but it's not uncommon. Some buyers ask the sellers to pay closing costs as a way of rolling in the closing costs by offering a slightly higher amount or just outright ask the seller to pay closing costs. It's all in how the request is structured.

Hope that helps,
0 votes Thank Flag Link Tue Jan 31, 2012
Seller pay closing cost to give incentive to buyer or if buyers do not have enough cash to pay closing cost.
0 votes Thank Flag Link Tue Jan 31, 2012
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