Home Selling in High Point>Question Details

Gwynn, Home Seller in High Point, NC

I want to sell my townhouse. I'm sure the buyer will ask me to pay closing cost as the seller. Do I pay this money out of pocket? Or would it

Asked by Gwynn, High Point, NC Wed Jul 28, 2010

come from another source? I don't have $5,000 to pay those closing costs and put a down payment on another house. And I am clueless to the home selling experience. Please help. Thanks

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Crystal’s answer
Gwynn

For clear understanding of the processes of selling your property, it is BEST to sit down with
a Realtor who could assistance you in running the numbers and address all of the likely expectations
of buyers and ways to negotiate to make the situation a Win Win for both parties involved in a timely manner.

How the money is paid depends on the sales price and other factors.

When you don't have the knowledge about something you turn to the source of the something you are looking to understand. In this case a Realtor and you've come to the right place

Good Luck

If you have any other questions, Continue to reach out...someone else may have the same question.
0 votes Thank Flag Link Thu Jul 29, 2010
closing contributions are paid out of the closing proceeds. That is not the same as "closing cost" to you. You MAY need to bring cash to closing and expect to, but that is for your typical expenses a seller will have. Things like revenue stamps, recording fee's ect... It could be a couple hundred to a couple thousand. It depends on the escrow and expected closing costs.
2 votes Thank Flag Link Wed Jul 28, 2010
Gwynn,
As others have stated, the $5000 would be paid out of your proceeds. The equity you have in your townhome would really decide where the $5000 comes from. I would suggest that you sit down with your Realtor and discuss different scenarios that might come up throughout the selling process. If you do not have a Realtor representing you yet, I would be more than happy to sit down and answer any questions you might have. Feel free to contact me through my profile here on trulia. Good luck!

Jason Ewing, GRI/CNS
Coldwell Banker Triad, Realtors
1 vote Thank Flag Link Wed Jul 28, 2010
As others have said, just because a buyer asks for closing costs doesn't mean you have to give any or all of it to them. It is negotiable.
0 votes Thank Flag Link Thu Jul 29, 2010
Gwynn,

You seem to have already gotten plenty of good answers. Also do not worry about asking too many questions. When selling or buying your home there is no such thing as too many or "clueless" questions. This is one of the largest purchases you will ever make.

Usually in a situation as you describe the buyer is going to ask for either a percentage of the purchase price for closing costs or a set amount. One thing you need to keep in mind is that all of these points are negotiable. Believe me just because they ask for something does not mean that if they do not get it or even all of their closing costs they might not need it. Your listing agent can help you there. They may ask for $5,000 but they maybe willing to take only $2,500 or none. When I am representing my buyers we will ask for the moon but as I stated all of these points are negotiable. That is where your agent comes in to help advise you on the negotiating.

As of course everyone has stated a concession such as closing cost is basically built into the purchase price. So if for example you offer your home for sale for say $100,000, then someone comes along and offers you $98,000 and then want $4,000 in closing costs. Well, first you do not have to accept that. Depending on your bottom line (what you are willing to walk away with) you could counter with $100,000 and $2,000 in closing costs. Of course a lot of this is going to depend on your numbers that you need.

I suggest you pick a great local listing agent that is from your area and interview a couple of agents to represent you.

I know both Len and Jason then do a great job, and they both are from High Point. I have even colisted with Jason in the past.

Hope this helps
0 votes Thank Flag Link Thu Jul 29, 2010
Hi there Gwynn, the payment of closing costs by the seller is generally viewed as a "seller's concession" that will be paid at closing out of the proceeds of your sale. As an example, let's assume that you accept an offer of $100,000 with up to $5000 in closing costs. The purchase price is $100,000 and the mortgage is based upon that purchase price, but you will net $95,000. The concession can only cover closing costs, so for example, if the closing costs are $3,500 then that is all that will be conceded. Buyers are well advised to broaded the language of the concession to include prepaids and escrows along with general closing costs so that the entire concession can be realized. So no it is not out of pocket, but instead out of proceeds.

You will be well served by engaging a listing agent to assist you with your sale. This is just one of many hurdles that you will face in the process.

Good luck and best,
Jeanne Feenick
Unwavering Commitment to Service - in New Jersey
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Wed Jul 28, 2010
Hi Gwynn,

I also agree with the responses from the others. If you are presently working with a REALTOR, you should ask them clearly explain all of the expenses that you may be faced with in closing this transaction.

However, if I read your question accurately, you have not placed your Townhouse on the market for sale yet, or if so you have not had a buyer make an offer to purchase at this time. It sounds to me like you are in the planning stage, which is a real good thing, that you are thinking and planning ahead.

In answer to the question of how the buyer will get a Credit (of any dollar amount) for their Closing Cost, it will be deducted at the time of the closing from the Total of Money that is due to you after all the expenses of the transaction have be paid, if there is enough money left to work with.

However, All transactions Do Not Include a Closing Cost Credit for the buyer. It is a case by case situation, and the end result may be that you do not give the buyer a Closing Cost Credit, or if you do it may not be as much as $5,000.

It is Best for You to work with a REALTOR that is knowledgeable in your local area, so they can work for you, in Your Best Interest.

I am a REALTOR with one of the Strongest Real Estate Companies in High Point, and if you would like, I would do whatever possible to work in Your Best Interest, and explain the entire selling process as clearly as possible to you, as it relates to your situation.

If I may be able to Help You further, Please do not hesitate to contact me.

Best Regards,
Rick Oak
Allen Tate Company Realtors
Web Reference: http://www.RickOak.com
0 votes Thank Flag Link Wed Jul 28, 2010
Hi Gwynn,

It seems you have gotten some fairly good advice already from my colleagues. the only thing I would add is that it is best to set down with someone who has the experience to guide you through this process BEFORE you even begin to market the home. There have been scenarios where an individual finds that they just can't afford to sale their home and buy another. This could put you in a serious legal predicament if you find yourself unable to conclude the sale of your home. It doesn't happen often, but every instance I have heard of the seller had no clue they were getting themselves in that type of situation. There are alot of good realtors that can help you with this, but you may want to have someone who specifcally handles listings as they would know the areas to probe to make sure you are safe to move forward. Let me know if I can help.
0 votes Thank Flag Link Wed Jul 28, 2010
The last gentleman is right, any seller paid closing expenses comes out at closing form your proceeds - just like the commission. The only 'up-front' fees you might have would be if you pay for some repair items during the repair negotiations, and even those could be deferred until the closing if it is okay with the person or company that does the repairs. Good luck!
0 votes Thank Flag Link Wed Jul 28, 2010
I comes out of the net proceeds from the sale of your home.
0 votes Thank Flag Link Wed Jul 28, 2010
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