Why would I pay the buyers closing cost? Seller's question in Crown Point, Indiana

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Real Estate Agent with McColly Real Estate
http://actvra.in/56G

 Why would I pay the buyers closing cost?  Do you feel this is what the buyer will expect?  A seller's question in Crown Point, Indiana

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Most first time buyers don't have the cash for both the down payment and closing cost.  It has become common practice for the buyers to ask the seller to pay this fee.  It is a way of getting the sale done in a difficult market.  Buyers can no longer ask the sellers for both down payment and closing cost as was common practice just a few years ago.  Now a buyer must bring at least some of his or her own money into the purchase of a home.

 

 FHA offers a loan with 3.5% down and on a $100,000 home that is $3500.00.  Closing cost can vary from 3% to 6% of the purchase price, adding another $3000 to $6000 in cost. Not every buyer ask for the entire amount and some do not ask for any.  However it is very common for the pre-approval letters we receive from lenders to specify that the pre-approval is contingent upon the seller contributing x number of dollars for the buyer.

 

The housing market of 2011 is still primarily a market with more inventory than qualified buyers.  As long as this remains true the sellers can expect the buyers to ask for and receive concessions.

 

 

 

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Marilyn S. Tolhuizen, N W Indiana Real Estate Specialist

219-616-7069

McColly Real Estate, Realtor, GRI, ePro

Crown Point, Munster, Dyer, St. John, Schererville, Winfield, Merrillville, Hobart, Portage, Hammond, Cedar Lake, Lowell, Lake of the Four Seasons, Demotte, Hebron, Wheatfield

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Rainmaker
267,342
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

It's a fact of life for sellers to contribute to buyer's closing costs. In most cases, it's less than making another price reduction to attract a buyer. "A bird in the hand," to keep the current buyer in the game.

Jan 17, 2011 11:45 PM #1
Rainmaker
114,215
Deborah Bly
RE/MAX Space Center - League City, TX
RE/MAX Realtor

I think it all depends on your market and really isn't it all about the bottom line. I mean if the buyer offers seller a full price offer and in return is asking for closing costs isn't that the same as negotiating on the home a bit?

Jan 18, 2011 09:28 PM #2
Rainer
81,029
Marilyn Tolhuizen
McColly Real Estate - Crown Point, IN
Real Estate Specialist - 219-616-7069 - NW Indiana

Yes it is part of the negotiation but I want my sellers to be aware of it going into the listing.  They don't always see it as a substitute for a price reduction.  Many see it as a gift and I want them to understand that it is this "gift" that makes the deal possible for many buyers.  And yes it is the bottom line that ultimately matters-that and getting the home sold.

Jan 18, 2011 11:46 PM #3
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Rainer
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Marilyn Tolhuizen

Real Estate Specialist - 219-616-7069 - NW Indiana
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