how does a sellers assist work in the PA agreement of sale?

Asked by Lise Corson, Bryn Mawr, PA Sun Aug 7, 2011

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cjinna, Both Buyer And Seller, Bryn Mawr, PA
Mon May 13, 2013
I had a buyer who was interested in purchasing my home but my agent was stating the buyer was asking for a 9% sellers assist does that sound right ?
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Erica Ramus,…, Agent, Pottsville, PA
Sun Nov 20, 2011
I see you are a NJ realtor. Really it works the same in PA or NJ! In our PAR agreements you disclose the offer price, plus seller's assist right up front on page 2. Do you have a more detailed question?
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Gwen Janicki, Agent, Bryn Mawr, PA
Fri Nov 18, 2011
One of the biggest obstacles for a first time homebuyer of Main Line Real Estate is the down payment requirement. The most commonly used mortgage product to help first time home buyers put as little down as possible is the FHA loan. It requires a 3.5% down payment that can come from the borrower’s savings, 401K, gifted from a family member, grant, or even a gift from their employer. You can ask the seller to contribute up to 6% towards your closing costs through what’s referred to as a Seller Assist.

However, here is an under-utilized idea regarding a Seller Assist. Many borrowers don’t realize that FHA charges two types of mortgage insurance: the up-front MIP (mortgage insurance premium) equal to 1% of the base loan amount which you can finance into your mortgage/loan amount. The second mortgage insurance is included in your monthly payment, until you reach the required equity amount, which is usually about 10 years based on a minimum 3.5% down. This can be a hefty increase to your monthly payment!

If you have an additional 1.5% or a total of 5% down, you could qualify for an option where the seller, through a Seller Assist, can buy out your monthly mortgage insurance payment saving you substantial amounts on your monthly mortgage payment and actually increasing your purchasing power.

See my blog for more detailed information regarding this strategy.
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Steve Sisman, Agent, Media, PA
Sun Aug 7, 2011
Good afternoon Lisa,

Depending on the lender, the seller can contribute up to 6% of the sale price toward closing cost. The seller basically receives 94% of the sale less seller closing cost at closing. Keep in mind that the househas to appraise for the full sale price amount. Do you have a PA AOS? Steve
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