Who will pay the closing costs when buying a foreclosure?

Asked by Jannie Wessell, San Francisco, CA Tue Sep 9, 2008

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John, Home Buyer, New York, NY
Tue Sep 9, 2008
Unless otherwise agreed in the offer to purchase, the buyer always pays closing costs.
1 vote
Craig Bosse, Agent, Walnut Creek, CA
Wed Aug 18, 2010
Like everything in Real Estate that is negotiable.

Fannie Mae REOs are one of your best bets if you are trying to get that covered. They offer a program called Homepath that is 3% down and allows a seller credit up to 6% towards closing. Thats the cheapest way to get into an REO now days unless you are a veteran and qualify for VA which is 0% down. The only downfall with VA is the property must be in good condition. Homepath allows you to do a bit of fix it yourself due to no appraisal needed.

I have a team of lenders and contractors that specialize in Homepath, FHA, VA, and a program called FHA 203(k) which allows you to finance in repairs at the same 3.5% downpayment.
Web Reference:  http://www.bosserealtor.com
0 votes
Jerry Flynn, Agent, Clayton, CA
Wed Sep 10, 2008
Jannie Wessell,

If you are referring to a Bank Owned Property, it all depends on how you write the contract. If you don't ask the seller to credit you any closing costs, then the Bank usually will pay the Title Fees, because they choose the Title Co. that will be handling the Escrow, and a few other fees.

If you ask the seller to credit you some money for closing costs, then that amount you ask the seller to credit you, will be paid by the seller at Close of Escrow. Of course the seller has to agree to pay the closing costs, when they receive you offer.

If you need assistance in finding a home, you found the right Broker.

Jerry Flynn
Old West Realty Inc.
Danville, Ca.
0 votes
Vickie Nagy, Agent, San Ramon, CA
Tue Sep 9, 2008
Hello Jannie,

When you purchase a foreclosure such as at a trustee sale or on the courthouse steps) the buyer is purchasing subject to any and all liens and are responsible for all costs associated with the transaction.

If you are referring to an REO (Bank owned, already foreclosed), those homes can and should have title insurance policies (the buyer generally pays for this policy), but the transaction can have a "clean" title, subject to no impediments or undisclosed liens.

My advice is to contact a real estate professional prior to any real estate transaction. I am available if you care to contact me at (925) 407-7987.

Kindest Regards,
Vickie Nagy
Empire Realty Associates
(925) 407-7987
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Sep 9, 2008
The seller (bank) will pay their share such as prorated taxes, deed prep, condo fees, recording fees, state taxes etc and the buyer pays their fees such as title company, title search, doc prep, recording fees and state taxes. The buyer can always ask the seller to pay their fees however in bank owned properties the cleaner the contract the better chance you have for it to be accepted. Good luck Jannie
Web Reference:  http://www.ScottSellsNH.com
0 votes
Catherine My…, Agent, Walnut Creek, CA
Tue Sep 9, 2008
Usually you will be paying your own customarily paid buyer side closing costs. However, some banks will pay some portion of the title insurance as they usually require you to use a particular company. Not all however.. so check the addendum you get carefully. You can also ask for the bank/seller to pay some (or all) of your closing costs but be sure your offer remains competitive with others they may be receiving and talk to your agent and lender about what you will need to get the most accurate dollar figure factored into your contract.
Web Reference:  http://www.diablovalley.net
0 votes
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