How are you? Thank you for your inquiry. If you have an agent working for you, all of this should have been explained to you in details, or even before you post up your house on the market or when an offer comes in (so you'll get an idea of what you net proceeds are). But here's my take on your question and a brief overview of how your seller's closing cost is broken down:
If your home is asking and accepted at $200,000, it will be $200,000 showing on both sides of the settlement sheet as the purchase price. For seller side, it would be $200,000 MINUS 6% (which is $12,000) MINUS whatever the agent's listing fee was MINUS U/O City Certification MINUS Notary Fee MINUS your current mortgage balance (if you currently have any balance) MINUS any other miscellaneous fees, then that should be your NET PROCEEDS that you walk off the table with.
As far as the buyer's side goes, the $12,000 seller's assistance should be included in the $200,000 amount. So in technicality, the buyer is only offering $188,000 because you had to subtract the $12,000 from $200,000.
IF the buyer side is $212,000 as the purchase price, then your seller side of the closing costs would show $212,000 as the purchase price as well. And then that means the buyer is actually offering you a full price offer of your asking price because $12,000 will be deducted from $212,000 to make it become $200,000. That is taking into consideration that your mortgage company had an appraisal that allows them to lend out $212,000 amount to support the purchase price of $212,000.
Hope that helps! If you have any questions, please feel free to email or call me at (267) 918-1880.
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Phong Lam, CSM
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You need to review the Agreement of Sale you executed to determine the numbers you actiually agreed to by contract. Good Luck. If you'd like my assistance reviewing your HUD1 and Agreement of Sale to see what happened, please feel free to call me. Have a great weekend.
All the best,
Larry B. Lichtman
REALTOR, Property Manager
Your Real Estate Resource For Life
often the first HUD contains errorsand will get corrected. Did everything turn out ok? Usually in a chat with your agent, you can get everything resolved. If the contract says purchase price is 200,000 then is that case, the seller assist makes the "price" in the eyes of the seller 188k. Its important that when the offer was made a seller estimate of cloing costs is provided so everyone is clear about whats going on.
Obviously, if not resolved to your satisfaction, call an attorney.
It depends on the way the agreement is written. This should be discussed with your agent as they are representing you. It would be a violation of our Code of Ethics to discuss the details of your transaction if you have an agent representing you.
Please discuss this with your agent. There could be various ways that agents handle assistance. In my opinion the answers on here are only going to confuse you more. For instance some will have the commission come off the sale price minus the assistance and others do not. In my opinion I would never have my buyer offer over the asking price so that they have to finance the assistance. If that is the case it isn't assistance they are just borrowing the money against the mortgage. In a round about way if the sale price is $200k with 6% assist than minus approximately 14% from the sale price to include the commission, transfer tax and assistance in Philadelphia to get your net profit without a mortgage payoff if any.
Purchase price = $200,000 and the commissions would be based on this number.
From the total closing costs owed by the buyer they would deduct $12,000 that is paid by the seller for the buyer.
A seller just looks at it like he sold his house for $188,000 and paid commissions on $200,000.
that being said, because the realtor is the one who writes the contract, of course they are going to do it in a way that is beneficial to them. In no way, however, should the HUD list $212,000 as a purchase price on the settlement papers. I also can't believe that the lender would approve the HUD with that price, unless that is the price on your contract of sale.
In answer to your question, however, in this marketplace, seller assistance is usually deducted from the sales price unless otherwise negotiated. I will also comment that most appraisers will take into consideration if a price has been increased to cover assist as it falsely inflates the market value of the property.