If the sellers agree to pay buyers closing costs, is this considered a contingency?

Asked by houseofheinz, Fayetteville, AR Fri Feb 21, 2014

For example, if seller gets a better offer, can seller ask buyer to remove the closing cost request?

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4
eyedrdi, Renter, Jacksonville, AR
Sun Jul 13, 2014
Can I ask seller to pay closing costs plus $5,000 for my 1.75% fha upfront insurance or even say the $5,000 is for landscaping? In Arkansas. I was going to use my VA but bank changed it to FHA because I had a short-sale with extenuating circumstances 16 months ago.
0 votes
Jennifer Lamb, Agent, Fort Smith, AR
Sat Feb 22, 2014
No. A contingency is something that needs to be done first in order to close. Ie: you must sell your home you love in now before you can close on this offer.

The closing costs are a concession. Part of a binding contract when signed by all parties.
0 votes
Chris Payton, Agent, Fayetteville, AR
Sat Feb 22, 2014
No. Once signed with one buyer, the seller is under contract with that buyer. The seller can take a back-up offer in case buyer 1 isn't able to close by closing date on contract, or for some other reason. If seller takes another offer that's "better" and closes with buyer 2, buyer 1 should seek legal advise.
0 votes
Dan Tabit, Agent, Issaquah, WA
Fri Feb 21, 2014
House,
No. If you have a signed deal, the agreement to pay the buyer's closing costs is not a contingency and your offer is not subject to being replaced if a better one comes along. A contingency is something like; contingent upon selling or closing of the buyers property, contingent upon approval of an inspection, contingent upon obtaining financing. These issues are subject to something else happening that is clearly described and easily verified.
Closing costs should have a specified dollar amount, as discount points and other items can be validly described as closing costs and jack up the cost. Typically I would indicate, Seller agrees to pay $5000 (or whatever amount your lender and Realtor suggested) toward the buyer's allowable closing costs. If the contract were to state, "Unless a better offer comes along' then it could be a contingency, but otherwise I don't think so.
If you have any doubts about your contract, and the agent isn't clear, please have it reviewed by an attorney. We aren't attorneys and haven't reviewed your specific contract.
0 votes
THANKS!
Flag Fri Feb 21, 2014
P.S., if you don't have a completely signed around deal, anything is possible.
Flag Fri Feb 21, 2014
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