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Old 05-16-2011, 08:12 AM
 
Location: My House
34,827 posts, read 32,948,914 times
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I'm just curious.

I know that there seems to be some logic that says that if a seller is taking a hit on a house, they shouldn't have to pay closing.

I am of the opinion that there's no reason not to ask. If someone needs to move a property, why should they not be willing to consider paying some (if not all) closing costs to make the deal happen?

Also, there's the option to increase the selling price of the home by whatever is needed to close (provided that the house appraises for that much), then have the seller pay closing out of those funds.

Thoughts? What are most of you seeing now?
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Old 05-16-2011, 08:21 AM
 
2,060 posts, read 5,426,195 times
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If it's a short sale the seller would have had to prove to the bank that they didn't have any cash lying around that they could just use to pay closing costs, and any increase in sales price would still go to the bank.

In the case of regular sales, I'm sure there are still sellers willing to pay closing costs but there aren't too many homes that will appraise for more than what they are being listed at.

This is yet another reason why so many short sales go unsold and most non-short sellers aren't listing.
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Old 05-16-2011, 08:43 AM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 35,656,795 times
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Quote:
Originally Posted by chicagojlo View Post
If it's a short sale the seller would have had to prove to the bank that they didn't have any cash lying around that they could just use to pay closing costs, and any increase in sales price would still go to the bank.

In the case of regular sales, I'm sure there are still sellers willing to pay closing costs but there aren't too many homes that will appraise for more than what they are being listed at.

This is yet another reason why so many short sales go unsold and most non-short sellers aren't listing.
In our market I would expect seller paid closing cost in most of the non-cash transactions. Note more than half our transactions are cash.
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Old 05-16-2011, 08:45 AM
 
Location: NJ
17,579 posts, read 43,298,042 times
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Appraisal issue aside, it shouldn't matter to the seller how they get their money. 300K sales price is no different from 305K sales price and paying 5K of closing costs.
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Old 05-16-2011, 09:11 AM
 
Location: Morrisville
1,168 posts, read 2,355,380 times
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In my world the seller (the builder) will pay closing cost if you use the preferred lender (the in-house lender). If you use an OSL the builder pays no closing costs.
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Old 05-16-2011, 09:14 AM
 
Location: Boise, ID
8,047 posts, read 26,573,053 times
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Quote:
Originally Posted by chicagojlo View Post
If it's a short sale the seller would have had to prove to the bank that they didn't have any cash lying around that they could just use to pay closing costs, and any increase in sales price would still go to the bank.

In the case of regular sales, I'm sure there are still sellers willing to pay closing costs but there aren't too many homes that will appraise for more than what they are being listed at.

This is yet another reason why so many short sales go unsold and most non-short sellers aren't listing.
Actually, in my area, the banks are willing to pick up buyer's closing costs on short sales also, all they care about is the net. If the net proceeds meet their requirements, they mostly don't care where the rest goes.
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Old 05-16-2011, 09:14 AM
 
Location: My House
34,827 posts, read 32,948,914 times
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Quote:
Originally Posted by manderly6 View Post
Appraisal issue aside, it shouldn't matter to the seller how they get their money. 300K sales price is no different from 305K sales price and paying 5K of closing costs.
Yeah... that was pretty much what I figured, manderly.

Hence my interest in getting a home for less than appraised value. For closing costs. Our credit union has a very good program we would like to use, but the closing costs are higher (mainly because it is a zero down program... and we want to keep our money liquid, in the bank).

I think the method you've outlined would work with the homes we have in mind.
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Old 05-16-2011, 11:17 AM
 
85 posts, read 246,813 times
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If you have cash on hand, there's no good reason to get seller assistance.
With a cheaper home price, you pay less interest, less taxes. The seller pays less commission.
With the seller assistance, you can and should just put that money towards principal anyway. It shouldn't be money you need, because you should've bought a house below what you've budgeted for.

Last edited by dogbert_2001; 05-16-2011 at 11:27 AM..
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Old 05-16-2011, 11:22 AM
 
Location: ABQ
3,775 posts, read 6,486,011 times
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All the time, especially among First Time Home Buyers and those who struggle enough to make a 20% down payment.

But for those that do get seller assistance, you're financing the closing costs. Since the seller only cares about the net, then an offer of say 300K purchase price and 8k in closing credits is the exact same thing to seller as 292k purchase price. I.e. If seller accepted one, he'll accept the other as well.

So, really, you're just financing those costs and rolling them into the loan if you go with the former.

Is that a good thing? Sure, if you want to keep more liquid now, then yeah, it's terrific, but that 8k spread over a 30-year loan will be a lot more to you later on, so keep that in mind.

And as dogbert mentions above, by rolling the closing costs into the loan, you are going to pay slightly higher property taxes. Here in California, the additional $8,000 in purchase price equates to roughly $100 more annually.
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Old 05-16-2011, 11:31 AM
 
Location: Woodbridge
265 posts, read 886,121 times
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It's very typical in our area for the seller to pay 2-3% closing cost asistance.
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