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Old 04-17-2011, 07:42 AM
 
4,457 posts, read 4,895,658 times
Reputation: 2022
As others have pointed out, at the end of the day, it can be cash-neutral to a seller whether to pay closing costs. So, if paying closing costs is the difference between selling and having one's home languish on the market, one presumably should pay a buyer's closing costs.

However, I also know where the OP lives. It's in a part of Vienna where, over the past 6-8 months, virtually every house has gone under contract in less than 60 days, with many selling in 1-3 weeks. Her house has been on the market about a week, and it's reasonably priced, in an area that's close to Tysons with very good schools. From an economic perspective, there is no particular reason why her views should be influenced by those of cash-strapped buyers who likely can't afford her neighborhood, or posters who want to use the thread as a vehicle to complain about greedy sellers. They really aren't her target buyers.

Of course, buyers and sellers always have different perspectives. It's the nature of the exercise. As a seller, I'd be slightly more worried that buyers who insist up-front on my paying their closing costs may turn out to be the types who think they have the upper hand in the negotiations, and turn out to be a royal pain at every walkthrough, etc. Of course, I wouldn't know for sure, as it might just reflect the buyers' personal finances, but that would be my concern, and you could not persuade me otherwise. Buyers who nickel and dime a seller at every opportunity prior to closing are not as desirable as those who are prepared to keep things simple, and they can end up costing a seller more money.

The bottom line is, right now, at that location, the OP doesn't have to pay a buyer's closing costs if she doesn't want to. She will find a buyer, and my bet is that it won't take her 4-8 months.

Last edited by JEB77; 04-17-2011 at 08:03 AM..
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Old 04-17-2011, 08:21 AM
 
61 posts, read 57,732 times
Reputation: 40
Quote:
Originally Posted by saganista View Post
Sellers are not interested in pricing to the middle of the market. There is not much dumber than selling your house this week for $550K when you could have gotten $585K for it next week.
There's also not much dumber than paying a ridiculous "over the comps" seller price to earn the title of "most expensive" house on the block either.

Quote:
Originally Posted by saganista View Post
Buyers are like parking spaces -- you only need one, and it might as well be the one who happens to be willing to pay the most for the house.
Homes are like parking spaces--you only need one, and it for sure should be the one that is priced fairly based on comps.

Quote:
Originally Posted by saganista View Post
Whatever the case, sellers are not engaged in some sort of public service function. Whether they are underwater or have owned the place free and clear for decades, they want the best net price they can get. Don't expect anything else from them.
Buyers are not engaged in some sort of public function, either. They want the best purchase price they can get based on fair market value comps. Don't expect anything more from them, either.
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Old 04-17-2011, 08:29 AM
 
61 posts, read 57,732 times
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Quote:
Originally Posted by JEB77 View Post
if paying closing costs is the difference between selling and having one's home languish on the market, one presumably should pay a buyer's closing costs.
And that is the summation of this thread. Buyers can request the seller pay all closing costs, the seller can deny that entirely, or you can meet somewhere in the middle. At the end of the day, it all comes down to your particular situation--be it buyer or seller.
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Old 04-17-2011, 09:26 AM
 
19,178 posts, read 19,445,009 times
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Quote:
Originally Posted by Dwellington View Post
There's also not much dumber than paying a ridiculous "over the comps" seller price to earn the title of "most expensive" house on the block either.
Well, you won't be on the short list of potential buyers that I have any interest in selling my home to. I guess the question then boils down to whether your attitude is likely to get you on anybody else's list either.
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Old 04-17-2011, 09:44 AM
 
66 posts, read 113,996 times
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It always cracks me up when I hear it's a "buyers' market" here. We heard that two years ago when we bought, despite the fact that decent homes in the $400K to $500K range were selling very quickly and for over asking price.

Two years ago our realtor suggested asking for $10 K in closing costs plus a one year home warranty. She said it was standard for her to ask that and it was usually agreed to. Sure enough, our sellers agreed to it so technically we paid $10K less than our house appeared on paper.

Our down payment was about a third, so we didn't need the money, but it made no difference to us (and presumably to the sellers) whether we paid $450K with closing costs or $460K without. (Not actual numbers.) We accepted this as a convention of the market at that time and what we ultimately paid for the house was a fair market price (or, as any buyer likes to believe, a slightly better deal).

I think if your house is priced very close to fair market value, you are okay not to agree to closing costs, or maybe get a higher price with closing costs if your buyers truly need that money up front. I think the little games are kind of annoying, but the bottom line is all that matters. Good luck selling your house!
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Old 04-17-2011, 11:18 AM
 
Location: Reston
83 posts, read 106,205 times
Reputation: 38
We sold our townhouse in Reston and bought a SFH in Cascades at the beginning of February. Describing the conditions at that time as a "buyer's market" would be accurate, I think. Part of that depends, of course, on the area in question and the type of house.
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Old 04-17-2011, 11:50 AM
 
61 posts, read 57,732 times
Reputation: 40
Quote:
Originally Posted by saganista View Post
Well, you won't be on the short list of potential buyers that I have any interest in selling my home to. I guess the question then boils down to whether your attitude is likely to get you on anybody else's list either.
It doesn't matter since neither I nor any other smart buyer would put an offer on your or any other higher-than-comps priced home anyway. My attitude is sound and precludes me from overpaying on any NoVa home.
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Old 04-17-2011, 05:09 PM
 
480 posts, read 579,128 times
Reputation: 218
As a seller, look at your bottom line. For a buyer, seller paid closing costs are really just a fancy way of financing closing costs into your loan.

Ex a home is listed for 500K
- buyer one offers 490K with 10K seller paid costs (480K net)
- buyer two offers 480K with 0 subsidy

In both instances as a seller your net is the same. Assuming both put 20% down, one's loan is going
to be $8K higher than two's loan. One still has 8K in the bank (had to put in an extra $2K in down payment because of the higher sales price). So for buyers it is a complete wash.

So that's why I don't really get the whole "seller paid" closing costs thing, because, in the end, it really is the BUYER that is paying for them. If you want to save actual money on closing costs go with a rebate realtor.
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Old 04-17-2011, 05:11 PM
 
Location: Arlington, VA
145 posts, read 253,028 times
Reputation: 101
Quote:
Originally Posted by Dwellington View Post
What are you basing that on, looking at comps, or just a gut feel?


I based it on my home search two years ago when I bought the house I'm in. I never would've paid for those two houses what I paid for this one because they're smaller. Then I extrapolated what I would have thought was a very healthy appreciation since I've been here and what I would ask for this house. Those houses are selling at the very top of the range of what I would have thought reasonable for my own, larger house.

For those who continue to complain about people pricing their houses too high, you are making your economic ignorance obvious. If the houses are selling, then they are not priced too high. Supply, demand, elasticity, blah, blah, blah...
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Old 04-17-2011, 07:27 PM
 
1,759 posts, read 926,843 times
Reputation: 924
Quote:
Originally Posted by eyeball View Post
For those who continue to complain about people pricing their houses too high, you are making your economic ignorance obvious. If the houses are selling, then they are not priced too high. Supply, demand, elasticity, blah, blah, blah...
Well, no.

People may pay a ridiculous price on a house for any number of reasons. They must buy now, they cannot fathom driving more than 20 miles to work, etc.

Just because someone buys the overpriced item doesn't mean that's what it's worth. It just means that person made the decision to overpay for whatever reason.
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