As we’ve previously discussed, it isn’t uncommon for buyers to ask that sellers assist them with the closing costs. If this happens, sellers and their agents will typically counter back and ask that the sales price be a little higher.
At the end of the day, sellers need to focus on their bottom line. For example, if a home is listed for $150,000 and the buyer asks the seller to pay $3,000 in closing costs, then the seller is really going to see that final sale as being $147,000. The seller only needs to care about what they walk away with at closing.
If you’re a buyer who needs closing costs assistance, but you do believe the home is worth the full price, offer more for the home. In this example, you would offer $153,000 in exchange for the seller taking care of those closing costs. This way, the seller is getting a fair amount and the buyer is getting the assistance that they need.
A common question that this brings up from sellers is when these agreed-upon closing costs actually need to be paid. Actually, this money will come out of the seller’s proceeds at the closing table.
Buyers need to remember that the money will show up as a credit at closing. Buyers will still have to pay up front for costs like the inspection and appraisal, but they will be reimbursed by the seller for an agreed-upon amount at closing.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.