Which sellers are more likely to pay closing costs? (appraisal, 4%, negotiating)

[RedZin]

We are in a unique situation. We are one of those couples that don't have a ton of ready cash, but do have substantial incomes and phenomenal credit.

(We just got engaged and married within the last year... it was a short engagement, we paid for the whole thing ourselves... been dating for years, so it wasn't a shotgun situation )

Anyway, we are fortunate in that our credit union will do a 100% mortgage (even on a jumbo)... they require substantially more for closing costs (including a 1.75% funding fee).


Our lender will allow up to 4% in seller concessions, though.

I own a townhouse that I bought while we were dating, but before we moved in together. With the housing market being so iffy, we decided that it was best to rent it out (it's in a great location, and my mortgage is small). I cannot get my equity out of it right now if I wanted to sell it. We can keep staying here for awhile, but truly? We need more room. I have 3 kids from a previous marriage, and my husband and I both work from home fairly often (need office space at home).

I was thinking that builders and people who have been in their houses for a long time might be more likely than someone who has been in a house for a couple 2 or 3 years (this is a generalization, of course) to be able to come up with 4% seller concessions.

What are your thoughts?

Naturally, with individual sellers, we had planned paying 4% more for a house (once we negotiated a fair price) to get the 4% concessions for closing. This isn't about trying to take some pour soul for a ride if we find a good house.

With builders, I figure whatever they feel comfortable doing, I'm not going to bend over backward trying to pay them extra money. They're businesspeople, not the people who lived in the home.

Your thoughts?

[Greeenback]

Originally Posted by meh_whatever

Anyway, we are fortunate in that our credit union will do a 100% mortgage (even on a jumbo)... they require substantially more for closing costs (including a 1.75% funding fee).

I saw where the Credit Union will pay for the Appraisal, in an interesting article. Check with them to see if they will pay the Appraiser for you. Your Credit Union may be participating in this particular promotion/program.

[Rakin]

It's hard to guess which sellers will pay a portion of your CC but I'd speculate being a starter couple you will be in a price range where it's very common to ask for some CC.

When we list homes for a seller, we include in previous sales information how much a seller had to pay in buyer CC on the sale of their home. This seller contribution is in our system (not always accurate). It's good for a seller to know that their price range includes many 1st time buyers who need help with CC.

Don't think seller paid CC is a freebie given by the seller to the buyer. most of the time it is reflected in the agreed upon sales price. If it is too high it can present a possible appraisal problem which can kill the deal.

[RedZin]

Rakin,

Thanks for the info. We are actually looking in the 350-500k price range. I know... wide range. We'd qualify easily for over 650k, but we don't want a huge house payment.

Soo.. if I'm looking in a given neighborhood, it's best to see what people are getting in CCs from the builder? If I'm looking at new construction, I mean?

[MikeyKid]

My experience with negotiating builders vs. resale is that you'll have much more overall success with the resales... I don't think any builder would contract something with 100% financing, let alone an additional 4% in settlement concessions.

[Squirl]

If you offered me full price on my property, as a seller, I would give you the 4% cc's. So, if you found a well priced house you might strategize your offer to drive towards that result. Possibly offer a bit less than asking and 5% cc; and then ending with the full price offer plus 4% cc's. If someone has a high mortgage balance or is under water, of course that won't work......

[Rakin]

Builders are a different breed. I like to know the bottom line price then just roll in CC if there is room. Builders work on a profit margin and can tell you what they can do. There's is a very competitive world.

[Momma_bear]

4% of 500,000 is $20,000. You might have appraisal issues if you are looking to pay $20,000 more than an appraiser says the house is worth and then have that amount refunded to you.