Seller Paid Closing Costs
by Frank Verni
HOW TO HAVE THE SELLER PAY YOUR CLOSING COSTS
In a buyer’s market, meaning there are more homes for sale than people to buy them, such as we have seen in the past it can be very common to have a seller credit up to 3% of the purchase price towards the buyer’s closing costs.
This means if you are buying a house priced at $400,000 the seller can actually pay up to $12,000 towards closing costs in both FHA and VA financing at the closing table. That basically knocks the price of the home down to $388,000.
How to write this into the purchase contract is simple. Ask your real estate agent about the value of the home, time on the market and if offers are coming in before writing your offer. This will give you a good idea as to how motivated the seller might be to give you a credit.
Then your real estate agent will write in the contract that the seller will pay 3% towards non-recurring closing costs.
In a seller’s market, it may require offering a price that is above the listing price based on the current competition. Homes during this time can get multiple offers especially if they of good quality in a much wanted area so it’s important to put in your offer quickly since the seller will probably accept one fast.
This doesn’t mean that you cannot request credits… it just requires some thought on how to structure your purchase agreement.
Your real estate agent can definitely guide you in this area. How to write the purchase contract is simple. Ask your real estate agent about the value of the home, time on the market and if offers are coming in before writing your offer. This will give you a good idea as to how motivated the seller might be.