Home Buying in Roselle>Question Details

Kesha, Home Buyer in New Jersey

Do banks generally agree to pay sellers concession for quick sales?My husband and I made an offer on a home

Asked by Kesha, New Jersey Sun Apr 27, 2008

in Roselle, NJ. We are first time home buyers....so everything is like a walk in the dark for us :) The home happens to be a quick sale. The bank is approving our offer, but stated they are not paying any sellers concession. We have the money for our down payment but i'm not sure we can cover all closing cost. Is there any way we can negotiate this with the bank? If not should we take a small personal loan from our credit union to cover our additional cost and fees?

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Victor Kaminski’s answer
Are you working with a real estate agent?
They should be helping you out with what should be a simple question to answer and should have been considered in advance.

The bank is approving your offer? Is this a Short Sale? How much below the asking price did they actually accept? If they agreed to coming down a lot chances are they won't also agree to a seller’s concession because they are probably already losing a tremendous amount of money even at the asking price!

If you really like the house and think your getting a good deal, you will need "SOME" money in order to purchase a home, if your real estate agent is still trying to sell you on 100% financing they are most likely not very reputable and probably just lying. To get 100% financing these days you'll need to have enough income to afford the home without a problem and also have excellent credit near the 800's

Good Luck....

0 votes Thank Flag Link Thu May 22, 2008
Banks do not pay closing costs on the purchase of a home.
A seller concession is what you are looking for where the seller must agree to contribute money from the proceeds of the sale towards paying the closing costs.

For an FHA loan up to 6% concession is allowed
For Conventional up to 3% is generally allowable.

0 votes Thank Flag Link Thu May 15, 2008

Do you have loan officer that provided you an initial prequal letter? Contact that loan officer right away to explore what options exist for covering those additional closing costs. Don’t take any additional loans, as new loans can adversely impact which mortgage programs will work for you. You wouldn’t want a higher rate on your mortgage and an additional payment to your credit union.

Before legally binding into the contract, find out that you can qualify for a loan program that will allow you to put less down, or roll expenses into the program.

When the bank returned their approval with changes, it was not binding upon you. Have you agreed to the changes?

If so, you should still have an out with a mortgage contingency.

Do phone your mortgage rep for advice.

Good Luck,
Deborah Madey - Broker
Peninsula Realty Group
(732) 530-6350
0 votes Thank Flag Link Sun Apr 27, 2008
Deborah Madey, Real Estate Pro in Brick, NJ
Hi Kesha. I'm assuming you mean short sale? Does the bank actually own it or are the current owners looking to sell for less than they owe and the bank agreed to accept your offer? There is a difference.

I do not believe that banks will agree to sellers concessions and as stated in your case, they are not agreeing to it. Your best bet is to speak to your loan officer about the best route to take with getting your closing costs. I know some buyers who have wrapped it into their loan and others who ended up putting less down so they'd have the money for the closing costs.

Again, assuming you have an agent who wrote up your offer, did she write the contract up with the sellers concession provision? Because if it was written in the contract and they agree to the offer but not the concession and you do not have a signed agreement by the bank, then you can negotiate the terms. However, if the bank came back and said yes to the dollar amount but no concession and you accepted that counteroffer from the bank and everyone signed off...not only should you speak to your loan officer but to your attorney as well. If you can't come up with the closing costs...I'm not sure that taking out a personal loan is a good idea. With that extra debt on the table, you may no longer qualify for the mortgage that you qualified for before taking on the extra debt.

Good Luck

Gina Chirico
973-228-1000 ext 132
0 votes Thank Flag Link Sun Apr 27, 2008
Is this home owned by a bank? Usually, the bank does not do concessions but sells the home "as is". That means if you do a home inspection and there are major problems like a mold, leaking in-ground oil tank or a bad roof; too bad. You still have a contract.

Do you have an agent negotiating for you?
0 votes Thank Flag Link Sun Apr 27, 2008
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