I am a realtor in Chester County Pennsylvania. My opinion is if the buyer isn't asking for much more than closing costs then 3-4% is fair. Most sellers are aware there will be a negotiation process and are prepared. I hope this helps. Goodluck!

Great answer below. In Tulsa, alot of first time home buyers are asking anywhere between 3-6% in closing assistance, with an average of 3%. Again, I would only ask for these costs to be paid by the seller, if it is necessary for the buyer to purchase. Another option is if the buyer truly cannot buy the property without help, they could offer an extra 3% for the price. In other words, if a buyer offers 100,000 on a home and cannot pay much in closing costs, they could offer $103,000 instead to offset the sellers net. This might make the offer more palatable to the seller.

You also need to consider what is happening in your particular market. In some markets buyers are able to ask for more in concessions from the seller. In others, especially in a sellers market, buyers are better to offer closer to asking price without any closing costs as multiple offers may come in.

All of the answers below are excellent. If you are offerring a 'reasonable' price based on market value ( which your Realtor can advise you about by running comparables of other homes recently sold in your area) then 3% is a 'reasonable' amount to ask for, particularly if you are a first time homebuyer who truly needs the help financially. If not, my suggestion is to make a good offer and ask for as little as you can regarding closing costs, or ask for nothing at all, because that would be the strongest offer. Each selling situation in unique and a good Realtor should be able to guide you through the offer process. Lisa Manley-Jeffers

"Reasonable" may be difficult to define. We know the lenders set limits, such as 6% for FHA. I think you have to ask yourself if the asking price is reasonable. Is your offer going to be considered a reasonable offer? A buyer should know the amount of seller participation they need, structure their offer to best fit those needs, and hope the seller responds reasonably.

J,

Mr. Eubanks is correct. The reasonable amount depends upon what your needs are combined with the needs of the buyer which results in a transaction that you both agree to. While the maximum allowed is 6% on FHA, the conventional financing (Fannie Mae/Freddie Mac) is 3%. If the home is eligible for a USDA Rural Development loan, you can go higher as there is no maximum.

That said, the buyer should know from their lender what their needs are so they are not asking for more than is really needed to get the proper loan for their circumstances. Unless the rate is being bought down or there are other unusual aspects to the loan, the 6% maximum is generally overkill.

Tim Epps
Fairway Independent Mortgage - Tulsa
918-528-4010

Reasonable is a term best used to what you have the resources to do. I usually see some allowances given in the 2-4% range, depending upon offer vs asking price, warranty, as-is or with a repair cap etc. However, I have seen offers as high as the full 6%, in lieu of repairs or an increased sales price. The max allowed is 6% on FHA & 4% on VA. Good luck!