moeronn

When you bought or sold a home, did the seller pay part of all of the buyers closing costs? I just wanted to get an idea how common this is.

Right now, we started escrow to sell my wife's condo and we are paying nearly 3% in closing costs. We raised the sale price to offset part of this, but most of it is coming out of our profit.

Also, my brother started escrow on a house he is buying with his fiance and they are getting roughly $10k in closing costs - but the sellers agent is representing both parties and only taking 2% commision (weird/complicated deal), so it really isn't "costing" the seller anything.

Please share any experiences you have had.

joerockt

I didnt pay any sellers closing costs when I bought my home.

This is usually a negotiating point. If you want to sell to someone thats on the bubble, and you really want to sell it to them, you could offer them to cover part of the closing cost.

moeronn

Most closing costs are the buyer responsibility (unless otherwise negotiated). Do you mean the seller paid your closing costs?

joerockt

No, the seller paid their closing costs and I paid mine.

moeronn

Gotcha.

doopstr

I believe this is usually done when the buyers don't have much money. They may ask the sellers to pay the closing costs. There is much to be negotiated here. The seller could say that they would pay the closing costs but the price of the house has to go up. So in reality what happened is that instead of the buyer having the pay X up front they end up rolling it into their mortgage.

I bet it is much more common for a buyer to request this in a depressed housing market. in a hot market the seller could just go get a better buyer.

moeronn

This is exactly the case. Our buyer has nearly no cash and is doing 100% financing, so he asked for 3% in closing costs. We raised the price slighly to offset some of this, but are still covering nearly all of what he asked for. A year ago it probably wouldnt have been an issue, but there is more inventory than buyers at the moment, so we're working with what we have.

NetEditor

This is how I did it (keep in mind, this was when the housing market was hot): I paid what they wanted but they had to pay all the closing costs, up to a maximum of $6,000. The seller also paid for a home warranty and some other stuff.

The closing costs came to only $4,500, so my loan guy built in a 1/4 point that he later paid back to me. I also used ZipRealty, which pays you a portion of the agent's commission. So I put nothing down, bought the house and came away with $4,000 in cash.

Fibonacci

I hope this deal works out for you. Your buyers must have rock solid credit because most lenders are now requiring some skin in the game.

joerockt

Shit, had I made such an offer, they would have just gone on to the next buyer. The house I bought was on the market for less then a week.

moeronn

Thanks - us too.

We saw his credit scores and his mid-score was around 740. Not outstanding, but definitely considered top-tier. He had a pre-approval letter, but we're still not holding our breath. That way, we'll be exstatic if it closes and not surprised if it doesn't.

MR1

I'm sure that you didn't know but this was mortgage fraud. Might not want to spread this information around publically. The lender didn't intend for you to not only have no equity but also walk away from the deal with cash. If everything was disclosed on your loan documents then I'm wrong.

MR1

Seller paying buyers' closing cost is legal and a typical part of the negotiations. In this current market it is a wise thing to do. For the future, every blank line on that contract except name and address is something that either party can negotiate. Everything just has to be disclosed.