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Old 04-10-2015, 07:33 AM
 
149 posts, read 166,645 times
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We're putting our home on the market today. When we met with the realtor, whom I've known for many years and in whom I trust, she showed us some "comps" and the price at which they closed. On many of them, the seller had paid all or a portion of the buyer's closing costs, usually in the $3000-7000 range. Our realtor said this was very common because "people just don't have the money to pay those costs".

When we buy our next home, I won't expect the seller to pay our closing costs, hence I'm very reluctant to pay those of our potential buyer. Could some of you who have experience with this please comment? Many thanks.
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Old 04-10-2015, 07:39 AM
 
Location: Austin
7,077 posts, read 16,893,484 times
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What you need to understand is you, as the seller, never actually, physically pay for a buyer's closing costs. They are financing them. Simple terms:

Option 1: Sales price $200k and you pay $5000 for closing costs. Your net is $195k.
Option 2: Sales price is $195k and you pay $0 for closing costs. Your net is $195k.

Isn't that the same offer? Only look at your net and if you're ok with the net, who cares how the buyer finances the sales price, as long as it appraises.
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Old 04-10-2015, 07:57 AM
 
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Read the below site, its very informative.

Should You Pay for Buyer's Closing Costs? Maybe!
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Old 04-10-2015, 11:30 AM
 
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It depends on if you are in a buyer's or a seller's market. If your place is desirable and you are anticipating multiple offers, don't worry about it. In that situation, the buyer will most likely offer to pay all closing costs in order to sweeten the deal. If you're in the other situation where the place will most likely sit for a while and you'll end up taking less than asking, you're going to have to sweeten the deal for someone to bite.
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Old 04-10-2015, 02:52 PM
 
Location: MSP
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Price your house right, get multiple offers, it won't matter. Just like JNR said.
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Old 04-12-2015, 09:48 AM
 
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This is customary in many markets, particularly buyers' markets, and particularly in deals where the sales price is less than about $200-250k (where buyers are generally not cash-rich). You never have to pay the buyer's costs; it's totally voluntary, but can certainly help close the deal if the buyer just can't buy your house without this assistance. And of course if a buyer is looking at two identical houses at the same price, and only one seller will pay closing costs, that will be the seller that sells. You can always counter an offer with a lower limit on the amount of closing costs you're willing to pay ($3k instead of $6k, for instance).
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Old 04-12-2015, 02:38 PM
 
2,188 posts, read 2,514,637 times
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Quote:
Originally Posted by FalconheadWest View Post
What you need to understand is you, as the seller, never actually, physically pay for a buyer's closing costs. They are financing them. Simple terms:

Option 1: Sales price $200k and you pay $5000 for closing costs. Your net is $195k.
Option 2: Sales price is $195k and you pay $0 for closing costs. Your net is $195k.

Isn't that the same offer? Only look at your net and if you're ok with the net, who cares how the buyer finances the sales price, as long as it appraises.
That's the key. Only the net matters to the sellers, unless the buyers are trying to roll too much closing costs into the loan to the point it's not going to appraise.
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Old 04-12-2015, 03:26 PM
 
Location: Georgia
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Yes, it's become more and more common. You didn't see it 25 years ago -- or even much 10-15 years ago. But a conservative estimate here is that at least 2 out of 3 sales involve the seller paying at least a portion of the closing costs. As FalconheadWest said -- you usually end up with the same amount, you just have a lot of cash-poor buyers.
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Old 04-12-2015, 03:30 PM
 
Location: Cary, NC
31,604 posts, read 55,320,924 times
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As was said, Net. Net. Net. Net.

There is a lot of superstition 'round here about sellers paying buyer closing costs. Don't fall into that trap.

The Net Proceeds to Seller is the ball to keep your eye on.
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Old 04-13-2015, 06:51 AM
 
149 posts, read 166,645 times
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Many thanks for all insightful and informative replies. Because the market here definitely favors the buyer, I'll keep an open mind about subsidizing closing costs.
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