Rosie, Home Seller in Oklahoma City, OK

Our potential realtor says we (seller) must pay buyer's closing costs because that is the norm in our OK City area. Is that right?

Asked by Rosie, Oklahoma City, OK Sun Aug 15, 2010

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13
Saying that you MUST in general is wrong. While it is completely "the norm" that buyers are requesting sellers to pay a portion of the buyers closing costs. It is not a MUST in every situation. Do you have an actual buyer? Perhaps your Realtor is saying that these particular buyers must have help with buyers closing costs in order to be able to purchase the property... that is pretty common these days. However, this is your home and you can accept or not accept any term of any offer. Is you Realtor a single-party broker or transaction broker? If she is a single-party broker she must work for your BEST interest. If she is a transaction broker than she is working to faciliate and to get the transaction complete. So, if she is a single-party broker representing you, than I would take into consideration what she recommends. By the way, what is the contract price and how much are the buyers asking you to pay. Ask the Realtor for comps of your area, and compare it to your contract... that should put you more at ease.

Good Luck!

Jennifer Henning, Realtor
Jenn@JenniferSellsOklahoma.com
405-625-1576
4 votes Thank Flag Link Sun Aug 15, 2010
Hi Rosie,
Okay, in answer to your question; one of our brokers pulled all of our listings a month ago addressing a question similare to your's. Right now in Oklahoma 70% of all purchase contracts have the seller paying the closing costs AND 100% of new construction contracts had the seller paying the closing costs.

Why? Let’s take a look at inventory to better answer this question. In the housing market if you have an inventory level of 6 months or more, it is said to be a buyer’s market. Once we drop below 6 months of inventory it becomes a neutral market. Not a buyer’s market nor a seller’s market, but a neutral market. Then, once we drop down to a three month inventory, it becomes a seller’s market.

Not knowing what you are going to sell your home for, I pulled the number of active Oklahoma City homes listed for sale as of today priced from $150,000 to $200,000: 529 homes and the number of homes that have sold from July 15 to August 15: 65 homes. This then gives us an inventory of 8.4 months for Oklahoma City. What this number illustrates is if no one listed another house on the market in Oklahoma City it will take 8.4 months @ 65 homes selling per month for the inventory of 529 homes to be sold.

Your Realtor is recommending you (must is a little strong) pay the buyer’s closing cost as a tool to help you sell your home and move it closer to the front of the line. Other tools we recommend are a lower selling price, seller’s home warranty, a seller’s home inspection, buyer’s realtor bonus, etc. Each of these items comes with a different price tag with the lower selling price generally the highest. Keep in mind too, if your house is on the market 3 to 4 months longer, you’ve paid for your buyers’ closing costs in house payments. Rosie, as the other realtors have mentioned in answering your question, it’s imperative your home is priced correctly in today’s market!

Did you know that in our world today 87% of the buyers start their home search on the internet? They are focusing on the different aspects of the homes in their price range and “seller pays buyers’ closing costs” is a great advertising grabber!

I certainly hope this helps you and Good Luck in selling your home! If you have any questions with this or other information, please don’t hesitate to ask, I’m here to help…..Bill.hayden@cbokc.com
1 vote Thank Flag Link Sun Aug 15, 2010
While it is not unusual for the seller to pay a portion or all of the buyers closing costs, every contract is unique to itself. Contract negotiations are just that -- 'negotiations'. Ultimately most buyers are interested in getting the best combination of terms - to include price and/or seller-paid closing costs.
0 votes Thank Flag Link Thu Oct 28, 2010
You only have to do what you feel comfortable doing.

Paying the buyer's closing costs is a great way to attract buyers, but it is not generally required.
0 votes Thank Flag Link Thu Sep 30, 2010
There are no "norms" in real estate. The ideal outcome is a win - win for the buyer and the seller. You can adjust your selling price to accommodate the closing costs. This may allow your buyers to get into the home without having to come up with more money up front. I hope this helps.
0 votes Thank Flag Link Mon Aug 16, 2010
You never have to pay the closing costs. What I would say is you should look at your bottom line and if you are happy with that don't worry whether you are paying their closing costs or not. Also we are seeing the market slow down, so don't get greedy and lose a buyer by asking too much. In the end, I hope you have a good Realtor because if you can't trust them you are in a tight spot.
0 votes Thank Flag Link Mon Aug 16, 2010
You never HAVE to pay all of a buyer's closing costs so your potential realtor is wrong. To many buyers have agents such as this and shows on HGTV help to perpetuate this idea when buyers on certain shows submit a low ball offer and then expect sellers to pay all closing costs on top of that!

It is always negotiable. I would keep interviewing agents. You want one that works for YOU and puts your best interests and needs first.
0 votes Thank Flag Link Mon Aug 16, 2010
It is something that many sellers do but you do not have to pay their closing costs. The buyer may not have enough money to purchase your property without your help but you have absolutely no obligation to pay. You have many options. You can refuse to pay the closing costs and wait for another buyer. If your home if priced under the appraisal value, you can add the closing costs onto the price of the house. If I can be of further assistance, please let me know.
Web Reference: http://www.csimshomes.com
0 votes Thank Flag Link Sun Aug 15, 2010
Rosie you never HAVE TO do anything. You need to know that you should do whatever you can control to bring teh most amount of potentilal buyers to yoru house , try to get some offers and bring about the quickest sale at the most obtainable price. The first thing you need to do is get a brokers price oponion, price your house at or near market value. Make sure though you leave room to negotiate. Virtually all offers will be lower than asking price and yes some may ask you to pay 3% of the closing costs. It is common not only in OK but throughout the country. Most buyers who are asking for their closing costs to be included need to have them included. So if you decline offers with this, you may be hindering the sale of your own house.
0 votes Thank Flag Link Sun Aug 15, 2010
good afternoon rosie..whether it's customary or not....paying closing costs and pre-paids for a buyer is strictly up to you, the seller...most every fha loan i have originated through the years has needed at least some help from the seller..by requesting help, the buyer isn't trying to short change your position as the seller...what they are telling you is that they like your home, want to buy it, but need some help to get to the table to close..also...there are no additional costs or fees (none) that are required for a seller(s) to pay regardless of how the home is financed, va, fha, or conventionally....there are however variations of how much a seller can pay towards the buyer's closing costs and pre-apids...depending on which financing option best suites the buyer's financial needs..
best regards
bob mcclure
mortgage one
brighton, michigan
0 votes Thank Flag Link Sun Aug 15, 2010
If your buyer is FHA than you, as the seller, pay $90 but all other buyers closing costs are negotiable. It sounds like you have not listed your house yet and your potential realtor is just letting you know what kind of contract you might get.
Good luck with the sell of your home.
Tara Streeter
Keller Williams Northwest
(405) 205-4065
0 votes Thank Flag Link Sun Aug 15, 2010
The Seller is NOT required to pay a buyer's closing expenses. It is a negotiation tactic that will benefit both the Buyer and the Seller in some, NOT ALL, circumstances. There are many challenges that Seller's face in our current market. Banks will not allow Sellers to contribute more than 3% to buyer assistance, so the Seller CAN'T offer more than that to help a buyer anyway. Buyer's need an average of 7k per $100k of downpayment (3.5% FHA Downpayment, 5% CONV +++ plus closing costs.) Meaning that the buyers must qualify for $107k loan for that $100k home. If your buyer is only qualified up to $100k, they need to be purchasing a home that is around $93k MAX! AS A SELLER, IT IS MORE IMPORTANT THAN EVER TO PRICE CORRECTLY FOR THE MARKET!!! Good Luck!!
0 votes Thank Flag Link Sun Aug 15, 2010
There are fees you MUST pay as a Seller, associated with FHA or VA loans. All other Buyer fees are typically negotiable. It is not uncommon to build a small "buffer" into your listing price, to accomodate for Buyer closing requests. Or, as I like to suggest, price the home "right" and deal with closing cost requests, as they come to us, the Seller & your REALTOR.

Lately, most offers from Buyers have included and/or required closing cost assistance. This is because some Buyers do not have the cash to handle the 3.5-5% required on FHA/Conv loans, AND, they do not have the funds to cover loan fees. Anymore, I rarely see a "you pay yours & I pay mine". But, it does happen!

If you are not comfortable with the verbage or requests of a "potential REALTOR," keep interviewing other candidates.

Best of luck!
Web Reference: http://www.ubhometeam.com
0 votes Thank Flag Link Sun Aug 15, 2010
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