U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
 
Old 07-23-2012, 10:15 PM
 
46 posts, read 80,283 times
Reputation: 25

Advertisements

We are negotiating on buying a house. The seller is giving us two options:

option a: pay 300K, seller will provide 10K credit towards closing costs
option b: pay 290K

We don't really need extra cash for closing. But, is there any other advantage to go with option (a)? For example, if we are to sell the house in 3 years, would paying a bit extra now fetch us a better price later?

Would we face issues during appraisal if we go with option (a)? On the positive side, if the appraisal comes lower, would that gives us one more chance to reduce the price?

If all things equal, then we are thinking of going with option (b).

thanks!
Quick reply to this message

 
Old 07-23-2012, 10:20 PM
 
Location: NJ
17,579 posts, read 38,295,421 times
Reputation: 16098
Paying 10K more now will not get you a better price later.
Impossible to guess if this will cause appraisal issues.


If you want more cash in your pocket go with option A, if you don't go with option B.
Quick reply to this message
 
Old 07-24-2012, 05:01 AM
 
Location: Cary, NC
31,592 posts, read 55,307,520 times
Reputation: 30150
Before accepting $10,000 in CC in your contract, be sure to check with your lender.
Will you actually have $10,000 in CC for which your lender will allow you to accept credit?

If lender allowed costs are only $7500, the other $2500 will stay with the seller, meaning you pay $2500 more for the property than you had expected.

OTOH, if you can use the entire $10,000, it is like a $10,000 loan for 30 years. Other than being additional debt secured by your home, at current interest rates that is not unattractive.
Quick reply to this message
 
Old 07-24-2012, 02:51 PM
 
Location: Florida Gulf Coast
4,083 posts, read 5,498,726 times
Reputation: 6407
Right, make sure you have the estimated closing costs before you decide. I asked for $9K in closing costs, for a couple reasons. First, the seller had just reduced his price $20K. I felt like psychologically he would feel better about accepting a full-price offer with $9K in seller-assisted closing costs rather than coming down another $10K. I had gotten the estimate showing the closing costs would be somewhere under $10K, and I didn't want to leave any money on the table. Also, I do think the higher price will help with comps if I decide to sell in a year or two. (I bought two years ago.) Don't get me wrong, I know I'll lose money (prices have dropped another $10-20K) and I know it's not a comp if it's over a year, but it still shows up in a Zillow search at the higher price. Psychologically, it makes ME feel better.
Quick reply to this message
 
Old 07-24-2012, 05:22 PM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
I would go with Option B. In my state we have to pay tax on the actual selling price of the property.
Quick reply to this message
 
Old 07-24-2012, 05:34 PM
 
Location: El Dorado Hills, CA
3,670 posts, read 7,974,554 times
Reputation: 3748
Your tax appraisal will likely match your purchase price, it does here anyway. I'm with ocngypz on that one.
Quick reply to this message
 
Old 07-24-2012, 05:59 PM
 
Location: Tempe, Arizona
4,511 posts, read 11,555,896 times
Reputation: 2179
Quote:
Originally Posted by NinaN View Post
Your tax appraisal will likely match your purchase price, it does here anyway. I'm with ocngypz on that one.
The OP should check their state tax assessment process. My state does not tax based on sales price. There is an annual appraisal process to set tax valuation.
Quick reply to this message
 
Old 07-24-2012, 06:16 PM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
Quote:
Originally Posted by rjrcm View Post
The OP should check their state tax assessment process. My state does not tax based on sales price. There is an annual appraisal process to set tax valuation.
We still call it a "Stamp Tax". It's paid at closing based upon the price of the property. Has nothing to do with assessments for tax rolls.
Quick reply to this message
 
Old 07-24-2012, 08:16 PM
 
Location: Tempe, Arizona
4,511 posts, read 11,555,896 times
Reputation: 2179
Quote:
Originally Posted by ocngypz View Post
We still call it a "Stamp Tax". It's paid at closing based upon the price of the property. Has nothing to do with assessments for tax rolls.
OK, thanks. We don't have that in AZ.
Quick reply to this message
 
Old 07-24-2012, 09:14 PM
 
4,626 posts, read 7,197,499 times
Reputation: 4735
Quote:
Originally Posted by rjrcm View Post
OK, thanks. We don't have that in AZ.
Back here in the east we have all sorts of stupid costs. Some states charge a fee based upon the mortgage amount. NY State charges a "mansion tax" on $1,000,000 and over sales. In some parts of NY, $1,000,000 doesn't buy much.
Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top