All good answers here!!! While there is a certain amount of individuality with each transaction, I would say that seller paid closing costs are very common in this market. We are working with lots of FHA buyers, who, frequently, don't have much more cash than what's required for their downpayment, so it's fairly regular that they will present the offer in such as way that they request the sellers to allow them to build their closing costs in to their offer price.
Does that help?? Let us know if we've answered your question adequately.
Seller paid closing costs is nothing more than you financing your closing costs for your loan. When it comes down to it...if the bottom line number for the seller is acceptable to him/her...Then you will likely come to a deal and receive signatures on your offer.
Do you have representation? I would be happy to help when possible :)
Cody Anderson, MN Licensed Realtor
Metropolitan Home Team
Joel Lobb (NMLS#57916)
Senior Loan Officer
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
Yes, seller paid closing costs are common today. But is the seller really paying? Usually not. It is common for the closing costs to be added to purchase price to get the deal financed. Seller is getting their net (bottom line) and buyer is really just financing the closing costs in the mortgage. Some REO properties and short sales are limited to how much can be put toward closing costs. If you are a seller you know what your bottom line is. Add closing costs to this and you have the offer number that works for you.
Most short sale properties that are lender approved will allow up to 3%, and they give instructions not to ask for more than that. Similarly, foreclosures usually allow 3%.
If you are making an offer on a tradtional home, remember that your offer is really the amount you offer minus the amount you are asking that the seller pay in closing costs.
If you are in multiple offers, you may want to inrcease your offer to cover closing costs if you are including them in the offer. You wouldn't want to be disappointed after making an offer to be out bid because of closing costs.
The easy answer is yes, seller paid closing costs are very common. The seller really isn't paying them however, the buyer just offers a higher price and includes the closing costs in their purchase price. The seller really only cares about their net and seller paids are just numbers on a piece of paper. As long as the appraisal comes in, everyone is happy:)
I am not sure if you are a buyer or a seller or maybe even just curious. Each tranasaction has 2 parties and the transaction has to work for both partiys in the end.
If you are the buyer and only have the amount needed for the downpayment required by the lender for the mortgage you are getting you will need to ask for seller conssions to make the transaction work for you. If you have a larger down payment and have the funds to pay your own clsoing costs it makes your offer look better to the seller becasue it raises their bopttom line. You will have to make the decision to ask for seller conssesion based on your circumstances at the time you write the offer.
If you are the seller you look at your bottom line. Depending on what you owe you may be restricted in what you are able to pay in seller consseions and what you can accept for a price. You also consider how strong your motivation is to move. In today's market a large percentage of financed offers with lower down payments are going to have seller conssesions requested as part of the offer. You may not want to pay them but if the buyer doesn't have the extra funds, sayig no to paying them may be saying not to that buyer entirely. The higher the price range the less likely you may be to see seller consessions asked for in an offer. Bottom line is that as a seller you make the decision about paying consessions when you have an offer in front of you and can consider all the factors affecting you at that time.
Sandy Loescher, Broker http://www.SandyGreenRealty.com
These are generalities. There's a lot of other details that determine the price the seller will accept. The market conditions of course are a big one. Neighborhood conditions, the condition of the home, matter too. What motivates sellers to sell varies widely and it could be a death, divorce, job transfer, high debt, loss of a job, a need to upsize or downsize, etc. How strong their motivation is determines what they are willing to do to assist a buyer to buy it and how deep they'll dig into their own pocket to sell their home. Keep in mind though, that many sellers can't afford to help much. Each case is different.
In most instances a buyer or person assisting a buyer cannot determine the seller's motivation. They often won't tell you. That's where experience counts. I would strongly recommend that you get an experienced buyers' agent to help you make the right offer and help with negotiations and assist in all the other details. The way this works is that you can usually find a good buyer's agent to work with you at no cost to you. It's the best free help you'll likely find...and I happen to know just such a person. Contact me for details.
The Duckwall Team of Realtors
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Sellers are generally being prepared by agents to accept offers with closing costs in order to glean the best sales price. Go in with confidence! If you aren't working with an agent, feel free to give a call or shoot an email over for more advice!