Sellers Closing Concession - Are Mortgage Insurance, prorated fees, taxes, insurance etc included in this?

Asked by One Of Seven, 11758 Fri Sep 2, 2011

Just closed on my mom's house and a sibling is insisting we are due a refund. Contract stated Seller will give to purchaser 10K closing cost concession at closing. Sibling is insisting we are due a refund as closing costs were under 10K unless you include morgage insurance, Lenders daily interest charges, prorated items etc. Lawyer insists we did everything correctly. I am one of 7 siblings and want to ensure them everything was handled correctly.

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Scott Godzyk’s answer
Scott Godzyk, Agent, Manchester, NH
Fri Sep 2, 2011
It depends how it was written, if it JUST said closing costs it is vague. Usually you want to spell it it such as will pay $10,000 towards closing costs including but not limited to points, prepaid interest, prepaid or prorated property taxes, prepaid property insurance and/or mortgage insurance. If the amount fo closing costs is under teh $10,000 there is no rebate unless it spells out what happens to the difference between the closing costs and the 10k such as the balance will be rebated to the buyer whoch if the buyer is getting a mortgage, may NOT be allowed.
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Cathy Sloan, Agent, Jacksonville, FL
Fri Sep 2, 2011
The time to address this would have been at the time of contract. The verbiage is vague. I would have gotten more clarity of what is considered closing cost by adding verbiage to the contract as a counter such as "including prepaid items" or "Excluding prepaid items"

In Florida there is a paragraph in the contract that inidcates what is considered closing costs. The verbige could be vague or it could reference prepaid items. Check the paragraphs relating to closing cost, not just the added statement of seller giving the purchaser $10K. This might clear up any confusion.
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Tania Hopkins, , Williston Park, NY
Fri Sep 2, 2011
The most common use for a seller's concession is for a buyer to build their closing costs into their mortgage. It increases the purchase price on the contract however it does not mean the seller is getting any more money. At the end of the day the only impact it has on the seller is that the house must now appraise at the new higher price.
However perhaps if this was an estate things may have been done differently. You should check with your listing agent and your attorney to find out what kind of seller's concession was given to buyers.
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Ron Thomas, Agent, Fresno, CA
Fri Sep 2, 2011
Everything you mentioned in normally included in Closing Cost:
In addition, they normally pad the numbers; they CANNOT have too little money to Close, they MUST Close.
So, they will normally send you a check, a week or two later for your share of the difference.
It could be a couple hundred, it could be more.


Good luck and may God bless
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Century 21 P…, Agent, Massapequa, NY
Fri Sep 2, 2011
Speak to your attorney. Depends how the contract was written and what was agreed to.
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