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)
Reply Start New Thread
 
Old 09-11-2008, 02:30 PM
 
Location: Broward County
2,517 posts, read 10,460,553 times
Reputation: 1378

Advertisements

I found a house that I want and the seller states he will pay the closing costs if I pay the asking price..fair enough. Today I received the good faith estimate. Should I inform him what the closing costs are ? Also...if he states he will pay the closing costs, does he automatically assume that includes the pre-paids as well ??
Rate this post positively Reply With Quote Quick reply to this message

 
Old 09-11-2008, 02:32 PM
 
Location: Cary, NC
39,052 posts, read 67,643,023 times
Reputation: 39946
If the Seller doesn't know the costs at time of signing, the contract is too vague.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 02:36 PM
 
1,305 posts, read 2,441,837 times
Reputation: 238
You should detail out exactly what costs the seller will pay for. Typically this will be escrow, homeowners title insurance, lenders title insurance, excise tax (if any), and the like.

Sometimes the sellers like to provide an allowance for a certain dollar amount of closing costs and this can be a good way to do it.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 02:43 PM
 
Location: Broward County
2,517 posts, read 10,460,553 times
Reputation: 1378
ok..he told me he would pay closing costs. Does this usually include all pre-paids as well such as 1st years taxes and insurance ? Is this automatically assumed ?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 03:28 PM
 
5,439 posts, read 5,340,802 times
Reputation: 1131
Quote:
Originally Posted by heydade View Post
ok..he told me he would pay closing costs. Does this usually include all pre-paids as well such as 1st years taxes and insurance ? Is this automatically assumed ?
Without reading your contract, I would not make any assumptions; you might consider inserting in the contract that the seller's contribution toward closing costs can be used for pre-paid items, discounts points, prorations and/or any other settlement fees.

This is not legal advice, just a suggestion.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 03:43 PM
 
Location: Cary, NC
39,052 posts, read 67,643,023 times
Reputation: 39946
Quote:
Originally Posted by MikeJaquish View Post
If the Seller doesn't know the costs at time of signing, the contract is too vague.
Quote:
Originally Posted by heydade View Post
ok..he told me he would pay closing costs. Does this usually include all pre-paids as well such as 1st years taxes and insurance ? Is this automatically assumed ?
Let me expand on my first answer.

Speaking from a North Carolina perspective, if either party will pay the other's closing costs, the specific amount should be spelled out in the contract.
Anything less is vague, and will be very difficult to enforce.
There is no acceptable "assumed" to work with.

Typically, if a party is requesting money for closing costs, we see contracts indicating that "Seller will pay $XYZ towards Buyers' expenses at closing." Seller assistance to Buyer is most common, although it can go the other way.
We do not note to which specific costs that $XYZ will be directed.
It is a "Net Game." $5,000 is $5,000 credit to the party, regardless of the expenses it covers.
We "assume" that it is an aggregate amount, that the attorney who draws up the Settlement Statement will spread it around on various costs until the amount is spent.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 03:44 PM
 
Location: Plano, Texas
1,675 posts, read 6,739,358 times
Reputation: 696
It is a buyers market right now, tell the seller the only way you will buy the home is if he or she will pay 3% of the purchase price towards closing costs and prepaids.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 03:49 PM
 
Location: Cary, NC
39,052 posts, read 67,643,023 times
Reputation: 39946
Quote:
Originally Posted by VictorBurek View Post
It is a buyers market right now, tell the seller the only way you will buy the home is if he or she will pay 3% of the purchase price towards closing costs and prepaids.

What is the purchase price, the value, and why a dealbreaker demand for specifically 3%?
How can we know whether that is reasonable or practical without having any insight at all to the transaction?

I see that boilerplate demand closing costs advice all over the place, and the basis in a specific realty is tenuous at best.
If the Seller is getting out by the skin of their teeth, and another 3% would push them into a short sale on a property that the Buyer really wants, how is the Buyer served by advice that comes from nowhere?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 03:55 PM
 
Location: Broward County
2,517 posts, read 10,460,553 times
Reputation: 1378
well, the house I want I flat out asked the seller that I would buy the house, but he has to pay the closing costs...he said YES. My mortgage broker told me to make sure there is an addendum to the contract that reads " seller will pay buyer up to 4.5% of closing costs and/or pre-paid items "

That should cover it !
Rate this post positively Reply With Quote Quick reply to this message
 
Old 09-11-2008, 04:06 PM
 
Location: Virginia Beach, VA
2,124 posts, read 8,405,128 times
Reputation: 816
ok, so write your contract like that and see what the seller says.... you are still negotiating.

but, 3% will usually cover closing costs and prepaids in our area, so I think 4.5% is excessive. What is the mortgage lender charging? points? are you trying to get the seller to pay points for you as well?

shelly
Rate this post positively Reply With Quote 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.


Reply
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

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - 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, 36, 37 - Top