I'm confused on why you are calling lenders on your buyers scores. Also, there are more rquirements to getting a loan than just a FICO scores. If you have questions on your buyers qualifying please speak to your Realtor.
If you weren't in a hurry to sell, why have you agreed to so much. If you have signed a contract to pay ALL closing cost and it turns out to be more than you thought, that is not the buyers problem and you may be bound to pay more than you thought. I'm sorry to sound so harsh but your situation may turn out to be a big headache. Some are mentioning seeking a lawyer - Oh my - then you have more cost. My suggestion - speak with your Realtor. Know all the facts, then let your Realtor help with the situation.
I tell everyone - know what you are signing/agreeing to!!!!
If I can be of further assistance, please call me at (661) 255-3335.
Cheryl Garner, Mortgage Expert
Fairview Mortgage Capital, Inc.
Second, I offered to pay a defined amount toward the buyer's loan origination, a set dollar figure, based on estimates obtained from FOUR mortgage lenders, using the information the buyer provided. If he didn't tell the whole truth on the information he provided, that is not my problem. The buyer is free to choose any loan product, just not at my expense. If he can work with what is written into the deal, great.
Based on the reaction here to the loan specifics, I offered to pay some but not nearly all of those fees. Again, it was a set dollar figure, not a blank check. And the BUYER is left to decide how much he wants that particular loan. The excess is out of his pocket, not the net.
Doing the math, I offered to pay a grand total 2.08% of the purchase price. That is the contract I offered. The deadline is the close of business today.
Indeed the credit given should have been capped, but the rest of the story is that FHA loans cost more than conventional ones - at least when you total up all closing costs.and here is why:
FHA loans mandate that the buyer develop and maintain an impound account. Remember that with any home purchase, part of the closing costs are 12 months worth of insurance upfront - but an impound account (dependent on the time of the year) as for 2 months of additional insurance and anywhere from 0 to 9 months of taxes upfront. With 6 months of taxes and a couple months of insurance, that could easily add about $2400 to the closing costs.
How can you save money? First check on the points. Unless the borrower could not qualify at a higher rate of interest, there should be no need to pay points. Ask about a zero point loan - that could save an additional $3480 off the top.
But given all of the above, most closing costs on any loan will run $7k to $10k or so dependent on points, interest due, impounds and so on. Title is a large part of that.
If the buyer does not have any money at all or little still, it may be adviseable to go with a higher rate and ask for zero points and a credit from the lender. Keep in mind this can only be done with a much higher rate - but that is an option as well.
Best of luck --
FYI, in most cases real estate agents and mortgage brokers are completely separate. RE agents have nothing to say about the commissions the mortgage broker charges.
Gary, we are feeling for you. Keep us posted on how you resolve this.
Depending on your state laws, d id you get an attorney review of the contract? When a seller offers to pay allowable closing costs they mention the percentage and maximum that they will pay and do not give a blank check.
Go to http://www.hud.gov and you will be able to read about closing costs and what is allowed.
Reinspection fees are becoming more normal in my area with FHA loans due to the lenders going through appraisal management companies. Any condition that can be spotted as an FHA issue the appraiser can call for a reinspection as a condition and get a little more pay as most have seen a 35-40% reduction (fee to the management company) in what they get paid for doing an appraisal.
Armed with hard numbers for title, escrow, inspections, reports, warranty, appraisal, and realistic loan fees provided by 4 different lenders, I countered offering to pay all closing costs, both buyer's and seller's. It will either get the message across or put an end to a rather weird negotiation at the Christmas low ball price and let us all move on to a more prosperous Happy New Year.
I think the reason many agents are talking about the Seller's agent so much is that we are confused why you are even considering this particular offer if it is putting it outside your comfort zone. So instead of accepting the fixed amount they asked back in costs, you are offering to pay an unknown amount. And it seems there are more than one offer and this is the best one you got? We just don't have all the details, and it seems to us you are considering a deal that you don't like at all.
If you haven't signed anything yet, you aren't "walking" from the sale. You are just not accepting it. So it's up to you, whether you want to counter or just not accept.
You can reach me directly at
This is a breakdown of this lender's fees directly from the loan officer.
1% buy down of interest rate(subject to change depending on market)
455 funding fee
150 CIR appraisal fee(in case appraiser needs to reinspect property)
700 15 days interest(approx)
700 12 mos insurance
175 3 month impound ins
3,267 9 month impound taxes
Sally, we are doing exactly as you recommend. I'm represented by an agent who both listens well and is actively negotiating the deal. I have also found a good local escrow officer and have solid estimates of the costs associated with the transaction. We are currently addressing what appear to me to be buyer's usurious lender's fees.
Emily, my agent and I have made a couple of counters that were both reasonable and crystal clear. Demanding more from me in order to pay for the dubious list of lender's fees above is going to wreck the deal. I'm sure that buyers have asked you for many things, some were reasonable and others, less so, but as a seller I shouldn't need to restate the obvious. I always have the option of saying no. Just because there is an ongoing negotiation, there is no mandate that we meet on the middle ground.
Lynn, educate me. You're saying that these fees are set and I must pay them? I think you're wrong. I think a buyer should be able to shop for a better loan.
I've either invested or wasted hours of my and my agent's time in ruminating and negotiating. It's going to be tough to sell me that these fees are reasonable and I should pay them all. It's down to this - he changes lenders or I walk. The difference between this lender's fees and other lenders the difference between an acceptable and unacceptable purchase price.
Let me restate my original question since no one answered it the first time - if YOU were the buyer's agent, would you tell the buyer that he's being overcharged by the lender? More bluntly, is this just a game where, buyer and seller be damned, everyone is protecting everyone else's commissions?
If you agreed to pay a blanket amount of just "all of the buyers' closing costs", it's my opinion that you're opening yourself up to paying more than necessary.
You really should have a copy of the GFE (Good Faith Estimate) & see what the lender is charging & where the fees are going. You may possibly find that the lender is taking advantage of this & is charging a higher than normal loan origination fee or other junk fees to pad their own pockets.
Your buyer seems to be getting about 3.88% from you to go towards their closing costs. 3% would have been more 'standard' to ask for a credit to the buyer, but I have received offers where buyers are asking for 4%.
Get that GFE, or ask your escrow officer for a HUD settlement statement showing BOTH sides (you may have to get the buyer to approve your receiving a copy of this)
Realtor Since 1996
All these are set fees.
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
I would try; but I would suggest that you advise your agent to contact the buyers agent and see what can be done.
I've been in this position before; but I stipulated on the contract that a Good Faith Estimate of the buyers closing costs be presented with the contract prior to its execution. Then my client (the seller) would know what they were paying for prior to signing the contract.