Which costs are potentially negotiable in closing costs

Asked by Trulia, San Francisco, CA Sat Mar 3, 2012

Are there negotiable and non-negotiable closing costs?

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James Vandeck, Agent, Pittsburgh, PA
Wed Apr 11, 2012
. Sellers quite often assist the buyer in paying for a portion of the closing costs. On both conventional loans and FHA type loans there are limits that the buyer is allowed to pay. This should always be a part of the sales agreement if you want seller assistance. As the say,"Always put it in writing." However, in Pennsylvania, most other closing costs are non-negotiable. Check with your Agent to be sure before you sign the sales agreement.....
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Joann Snyder, Agent, Coraopolis, PA
Sat Mar 3, 2012
Negotiable with whom...the mortgage company or the seller?
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Christa Ross, Agent, Pittsburgh, PA
Sat Mar 3, 2012
The closing costs are not really negotiable but who pays them may be. Jeffrey did a good job of listing all the costs and as you can see most of these are related to taxes or fees. However, you can request a seller assist of up to 3% on a conventional loan or 6% on an FHA (at least at this time 6% is still the case, but it may be going down soon). With a seller assist you are requesting that the seller help with your closing costs. Just remember that whatever the amount you request will be a reduction in the amount the seller gets out of the sale of their property so you will want to balance what you offer in price with what seller assist you request. It is not uncommon for a buyer to pay a higher price in return for the help with closing costs.
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Jeffrey Benn…, Agent, Pittsburgh, PA
Sat Mar 3, 2012
The largest component of closing costs is usually taxes (especially on higher-end properties), which of course are not negotiable at all. Well, the total is not negotiable, but it is possible to negotiate who pays them. You can ask sellers to pay some or all of your transfer taxes, which is another form of "seller assist."

Then you have title insurance, the rates of which are regulated and not negotiable (though you should be sure you get the correct rate; e.g., replacement, re-issue, depending on how long since the last sale).

Then there are title company fees, which are usually low and related to non-negotiable things like government recording fees. You can sometimes save there by closing in their offices instead of the broker's, and some also discount for cash deals.

Sometimes lenders have "doc prep" or other "soft" fees that are theoretically negotiable. Though these days few will waive these, particularly the larger lenders. (These days, you should be thrilled to pass appraisal and close at all :-) Fees are more variable than interest rates; the best way to save may be to shop around. They will give you a GFE (Good Faith Estimate) with guaranteed accurate costs.

You could skip the survey ($250 or so), or defer it until after closing, particularly if there is an existing survey, though you're increasing your risk by doing this. (It's possible there's an encroachment you won't find until it's too late.)

So in general there aren't many ways to reduce the total closing costs, if you and your agent have reviewed the HUD and corrected any errors. But some services are optional, and you can sometimes "redistribute" costs -- even taxes -- to lower the cash you need to bring to the closing table.
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Terence Young, , Pittsburgh, PA
Sat Mar 3, 2012
All closing cost are negotiable.

Terence Young
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Doug Caye, Agent, Allison Park, PA
Sat Mar 3, 2012
If its an actuak "closing cost" than it is a fee needed to fund the loan- whether it is a portion of the transfer tax- a years home owners insurance, a years county, local and school paid up front as your lender requires. The cost of doing business with your lender of choice may have some area of negotiation such as the origination charge etc,,, but again, If you are an educated consumer you shoukd be shopping rates and fees right now. asked for good faith estimates and ask questions!! see what corners they may be willing to cut etc... There is not a HUGE room for reduction I can promise you that. If your buyer agent charges you a fee ( I do) that may be something that you can ask to have removed etc... but If im saving someone 10,000 on a mortgage Im pretty sure I earned the extra 500 bucks :) so I dont cut mine. What you should really try to take advantage of is how much seller assist your particular type of mortgage will allow for- Conventional usually no more tha 3%-- FHA 6% and in some cases w VA up to 8%! thats where you are really going to limit what you are brining to the table at closing... yes, you are paying it back over thirty years an 3,9 pct but.... whats the downside to that... Anyway im happy to help should you want to talk further. Doug Caye Coldwell Banker 412 576 5561 or e mail me at therockinrealtor@verizon.net . If you are working with a quality lender and agent they will work with you as best they can.
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