Home Selling in Middletown>Question Details

Mickey - R.E.…, Home Buyer in Middletown, NJ

Maximum seller paid closing costs for conventional loan?

Asked by Mickey - R.E. Investor, Middletown, NJ Sun Oct 20, 2013

I am selling a condo to my current tenant. His offer is OK and asks for me to pay 5% closing costs. Are there any restrictions on this? Is this high-low-middle? In my area of NJ I know seller paid closing costs are not the norm, as it is in other areas of the country, so I would appreciate replies from NJ brokers/agents on that part of it. Thanks

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3% for conv. loans is the max and 6% for FHA, VA and USDA
1 vote Thank Flag Link Sun Oct 20, 2013
Thank you, that's what I asked.
Flag Tue Nov 26, 2013
VA is 4%, Conventional at 5% down is up to 3% CC, 10% down or more is up to 6% CC, FHA up to 6%, and USDA is up to 6%.
That is correct that the home must appraise with the sales price plus the CC. However, there really isn't anything to worry about as a seller. If it doesn't appraise then just have it in writing per the contract that the CC will be lessened, not the sales price. If it closes and there's any CC left on the table then it goes back in the seller's pocket.

Texas Realtor... However, these are government loans so the down payment and Closing Cost percentage is the same throughout the country. :)
0 votes Thank Flag Link Thu Oct 2, 2014
The maximum percentage allowed for a seller's concession depends on the buyer's down payment amount. At 95% financing on a conventional mortgage 3% is the maximum seller's concession. However, if the buyer were putting 10% or 15% down the percentage for allowed seller's concession increases.
0 votes Thank Flag Link Tue Oct 22, 2013
They are right. The question becomes, is it most beneficial to you because your property has to appraise for the full amount (sales price + concession %) with you not getting that concession %. If this is your best deal, ok. For restrictions talk to a mortgage professional like Fred Burt at
in Hammonton, o: 609-294-4620 / m: 609-617-2144 / f: 609-294-4639

He'll give you complimentary guidance.

Good luck.
0 votes Thank Flag Link Mon Oct 21, 2013
It's not uncommon for buyers to ask for closing costs, depending on the type of loan for example FHA, there is a cap of 6%.
0 votes Thank Flag Link Sun Oct 20, 2013
depends on the type of loan he is getting. Seller concession to pay for buyers closing costs can range from a maximum of 3-6%

If the full 5% is not used for closing cost you can request the balance.

typically when a buyer asks for closing cost it is added to the agreed purchase price.
0 votes Thank Flag Link Sun Oct 20, 2013
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