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Old 05-17-2013, 05:43 PM
 
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Is it pretty common that sellers have to pay the all closing costs? We sold my dad's place over a year ago and while the buyer didn't try to get us down very much in price, they insisted on us paying closing costs( it was very FHA and very little down). I also have heard of other buyers doing the same thing. Is this more of a requirement only in a slow market ? Would it be happening if it was a hot market and you had multiple offers on a house? Thanks for responses. :-)
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Old 05-17-2013, 05:53 PM
 
Location: NJ
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All you should care about is the net price as a seller.
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Old 05-17-2013, 06:26 PM
 
Location: Baltimore
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It's not very common at all other than a request by first time buyers.

If you really wanted to nitpick, you would want to lower the sales price by the additional closing costs instead of paying additional closing costs. Paying the buyers cc leaves you paying more money toward commissions and closing costs since they are a percentage of the sales amount.

So no, you really shouldn't just care about the seller net but rather look at all the factors involved.
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Old 05-17-2013, 06:41 PM
 
Location: NJ
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Quote:
Originally Posted by davecj View Post
It's not very common at all other than a request by first time buyers.

If you really wanted to nitpick, you would want to lower the sales price by the additional closing costs instead of paying additional closing costs. Paying the buyers cc leaves you paying more money toward commissions and closing costs since they are a percentage of the sales amount.

So no, you really shouldn't just care about the seller net but rather look at all the factors involved.
I disagree. In some areas it is very common. For everyone to ask. Not just first time buyers.

And are you really going to argue over the commission on closing costs? On closing costs of $7,000 that would be a commission of $420 at 6%.
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Old 05-17-2013, 09:29 PM
 
Location: Florida -
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I bought a house on a reduced offer a while back and agreed to pay the closing costs ... thinking they would be about $3K. My mistake - they were over $7K, but, I had already agreed to pay them. Everything's negotiable, including closing costs, but, one is probably smart to get a bank/title company estimate on how much 'total' closing costs will be.
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Old 05-17-2013, 09:59 PM
 
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It seems that Buyers asking for help paying their closing costs is somewhat of a regional thing. It doesn't seem to be as common in this area as it seems to be in other areas around the country--at least by reading so many of these posts.

Personally, I would find it a bit objectionable if someone asked me to cover their closing costs. Hey--if you can't afford paying for your closing costs maybe you just shouldn't be buying the property. Of course, all things are negotiable so it's just another of the terms which need to be dealt with. But I think many buyers want to build in the "expectation" that the Sellers will pay part of the closing costs just so they can get a better deal.

Granted, a Seller could raise the price to cover any amount paid in closing costs (mindful that the need for an appraisal might complicate matters) but then it becomes just a game. There are enough games already in real estate; there should be no expectation that a Seller should pay for a Buyer's closing costs.
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Old 05-17-2013, 10:22 PM
 
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I think it is getting to be more common now because due to the market of the last few years many buyers, both trade up and first time, have less cash.

Many people who are relocating or trading up may be writing a check to sell their old house, or just breaking even after paying commissions, unlike in the past when they would have had their down payment back plus some profit to roll over in to a new house.

First time buyers may have been hit with a period of unemployment or underemployment in the last few years that reduced their savings. And despite recent gains, the stock market hasn't performed as well in the past 10 years as it did in the 80s and 90s when it was a common source of funds for first time buyers.

I don't see why it matters to the seller as long as the net price is the same. At least where I am the commissions are calculated on the net price so there is no difference to the seller between a house that sells for $195k with $0 closing costs or one that goes for $200k with $5k closing costs.
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Old 05-17-2013, 10:35 PM
 
Location: Baltimore
1,759 posts, read 4,268,876 times
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Quote:
Originally Posted by manderly6 View Post
I disagree. In some areas it is very common. For everyone to ask. Not just first time buyers.

And are you really going to argue over the commission on closing costs? On closing costs of $7,000 that would be a commission of $420 at 6%.
Yes because I'm a disciplined real estate investor. It's not just $420 from commissions. It's additional closing costs paid on that $7000 as well as the taxes paid on that additional $7000. Further, for the buyer it's $7000 more in appreciation that they need for resale, more lending and title fees based on that $7000 and a higher property tax assessment.

It all adds up.
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Old 05-17-2013, 10:52 PM
Status: "I can learn to admire w/o having to aquire." (set 14 days ago)
 
Location: Where the last of the "Big 3" has retired. Spurs country.
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All I know is I am "old school", and "back in my day" the buyer paid their own closing costs. I am also of the generation that HAD to put down 20% to qualify for a mortgage. I know, I know, times change, and they have, but not for the better in the RE market, IMO. Thank God (and I do) my house sold last year to a cash buyer. I don't believe in paying the buyers closing costs, so that would have had to be worked out somehow.

First time home buyers need to plan and save their money like me and my generation had to. Yes, it does take time, but it is a goal. Is this word used any more? I have come to learn that everyones PRIORITIES vary. Those that want to buy a home can do it, they just need to budget a h*ll of a lot better. Give up the Starbucks, even the McDonalds fancy coffee drinks, the pricey IT items, the expensive meals out, the pricy purses, shoes, etc. Quit giving away their HARD EARNED money to the already rich designers and pay their "down payment account" instead.
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Old 05-18-2013, 06:37 AM
 
Location: Chesterfield, VA
1,218 posts, read 4,444,443 times
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On paying the commission on closing costs, if that is a concern, where it states in the contract that commission is paid on the gross price, simply cross out gross and put net - problem solved.

In my area, it is by common for the seller to pay some portion of closing costs. Especially for those using a VA loan and 100% financing. I recently wrote a contract and we initially had $7500 in closing cost credit. I write it so that the funds can be used for "closing costs, prepaids, discount points and/or VA funding fee" so that no money will be left on the table. Then after the home inspection, we were able to increase that amount an additional $1000 to cover some repairs the seller did not want to do prior to closing. My client was very happy!
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