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It amazes me that many Buyer's Agents are without enough of those hanging things to advise their clients what to offer. If he/she doesn't know, who does. I know many agents have been told: Oh, you never tell the Buyer what to offer. [!] Yeah, that's a lot of care and concern for the Buyer. The Buyer has to make a choice whether to offer thousands less, thousands more, exact price, ..... Wouldn't it be nice if the expert standing beside you would just give you their best frickin knowledge and advice?
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ok, maybe some one person will get a laugh:
I read the OP and started typing a couple things, thinking there was a loan.
I typed:
Buyers very often require that the Seller pay their costs or part of them, otherwise they can't do the deal. It happens every day and it's been happening for decades. But the Seller can choose to not agree to it. It often rubs a Seller the wrong way to be asked for it in an offer. Especially a self-made person. "Nobody paid my closing expenses. I ain't payin' nobody's stinkin' closing costs." Some Sellers will not even agree to you bumping the price up over their price so you can finance your costs.
Then I read through the thread. I think there's a couple people I have met somewhere.
This doesn't apply of course when there is no stinkin loan.
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"were estimated by buyer's agent at about 10K). "
Your agent thought you were getting a loan, too??
or maybe you are a 1%er?
Sellers NEVER pay closing costs. The buyer finances the closing costs into their loan which in turn increases the sales price they could have bought the house for.
Thank you. Finally, someone with sense.
We can thank HGTV for a lot of these mis-conceptions, or what they think is right.
If I sell a house for 700K, no, I am not paying the closing costs, like the above poster said, it is included in the buyers mortgage, or piggy bank, I don't care.
LOL
This doesn't apply of course when there is no stinkin loan.
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"were estimated by buyer's agent at about 10K). "
Your agent thought you were getting a loan, too??
or maybe you are a 1%er?
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That was my thought too, why the big concern over closing costs if this is all cash? I think the OP was hoping to have their taxes and insurance included as costs paid by the seller. They must have very high taxes to get up to $10K.
I have a house on the market. I got burnt last year when a VA lender disqualified the buyer (who seemed maxed out from the get-go) a few days before closing. Half the cost of a house inspection, minor repairs subsequently, and six weeks were lost. The buyer was pre-approved for his loan. I do not think pre-approval can be counted on when a buyer is putting next to nothing down nor towards inspections etc. Fortunately I had refused to pay for the appraisal or make a loan to the buyer for the appraisal. This despite my realtor's trying to strong arm me to make the buyer a loan. I did not trust the buyer from the get-go. After the deal fell through, I took the house off the market in the dead of winter.
In late spring I put the house back on the market. Yesterday I had another offer. The net to me was well below what I was willing to accept based on comps. The buyer also asked the seller (me) to pay 3% of closing costs. All told the bottom line on the buyer's side was he/she was paying all of 0.5% of the sales price, and only at closing. No skin in the game during the month of inspections etc. She was financing the rest with an FHA loan. No copy of an earnest money check was provided, either. The signs were the buyer was maxed out. Point is, if the buyer is not putting any meaningful cash into the deal, then backing out is too easy for him/her. I think the way a lot of low income buyers look at things today is that there is no purpose to putting money down. They want to see if they can shake a seller out of the tree dumb enough to go forward with and pay for inspections while the buyer knows it's iffy as to whether they will be approved for a loan. Asking the seller to pay some percentage of closing costs, with the buyer paying so little, is a symptom to me of a shaky buyer on whom I will not spend a dollar on inspections or appraisals nor reset the price so as to get back the proposed percentage of closing costs. Realtors kind of disgust me at this point. They do not have the intelligence to see that these buyers who do not understand the costs of buying and then owning a house destroy neighborhoods and so their bread and butter.
But I'll add - you paid half the inspection and they wanted you to pay appraisal? Paying closing costs is bad enough but I would NEVER pay for anything like inspections and appraisals before the deal closed. Even if you have a strong buyer, it might not close, and you'll be out that money. Having the buyer pay all those things only adds to their skin in the game (and are normal buyer costs, anyway.)
I agree - you want the buyer to be putting down decent earnest money which they could lose after certain contingencies are removed, as well as paying for the inspection (which is usually done early in the transaction, so they'll quickly be out that money) and the appraisal. A seller shouldn't be paying for the buyer's due diligence, anyway.
I'm sure this was probably mentioned somewhere else in the thread, but when you have a buyer so stretched that they can't afford a down payment, the inspection, appraisal, etc., you're dealing with a buyer with no flexibility. No matter how well-priced the house for its condition, they will likely nickel and dime you for everything which comes up in the inspection because they can't afford to make any repairs.
We've had both kinds of buyers and the experience with a strong buyer was so much more pleasant and smooth.
After 28 years in multiple markets, I am here to tell you Never say NEVER.......In all three markets I have been in, Sellers have often been asked to pay part of, if not all of the closing costs. Sometimes it is a negotiating tool used by buyers and their agents and sometimes a necessary means to an end. After the crash, we had many folks that were upside down, desperate to sell and would consider any means of getting out from under their loans. With that said, long before the crash people were negotiating closing costs in their deals. Often a buyer can purchase the home but after the down payment does not have the cash for closing costs. Although rolling the closing costs into the mortgage is often done, it can also have a negative effect on the appraisal, therefore having the seller pay part or all of the closing costs is what will get the deal closed. All of this depends greatly on the position of the seller. Do they NEED to sell right away? Is the home vacant and the sellers have already transferred and would like to get rid of paying 2 mortgage payments? There are many factors to consider when the decision of closing costs are made. However, asking for them is common in many markets across the country. It does not mean you will get them.
I'm never not going to ask for the seller to pay my closing costs. They don't have to agree, but I'll still ask. I figure that they expect buyers to ask, so it's already been factored into the sales price.
I know this is a really old thread but without reading all 4 pages, was it ever answered why on Earth she was asking for closing costs on a cash offer? And where in the world did she get $10,000 closing costs figure?
And this made no sense:
Snipped from first page
Quote:
...the seller an offer of $10K under asking or an offer of full price plus $10K in closing costs is the same. In both situations the seller nets the same amount. So, one is not going to be more attractive to them than the other...
Asking $100,000
Offer $90,000 is going to net the seller 90K
Offer $110,000 plus $10,000 closing is going to net the seller 100K
He/She's saying an offer of full price plus $10k, so that means $100k with $10k of it being for closing costs. Net to seller is $90k.
The problem is that the seller, technically, doesn't net the same. Title policy and commissions, and anything else based on sales price will cost more to the seller, so when the buyer asks for closing costs to be added into the sales price, there are small fees the seller is paying extra than a contract without closing costs.
He/She's saying an offer of full price plus $10k, so that means $100k with $10k of it being for closing costs. Net to seller is $90k.
The problem is that the seller, technically, doesn't net the same. Title policy and commissions, and anything else based on sales price will cost more to the seller, so when the buyer asks for closing costs to be added into the sales price, there are small fees the seller is paying extra than a contract without closing costs.
Thanks, that makes more sense.
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