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Closing Costs. Sign In/Join 
Picture of rker321
posted
I have been seeing that in today's world anyone that buys a home wants the seller to pay for their closing costs.
My questions is . Why? this indicates to me that they really don't have enough money to buy that house. and they want to stick the sellers with costs that are their responsibility, more or less gipping them of their money.
Now, what is a seller to do in order to come out ahead regarding this issue. and I don't mean negotiate the price regarding the closing costs. How can an seller sell their home in the most advantageous manner to them.
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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A lot of what you see is on TV. We sold our home last spring and were not asked to pay closing costs for the buyer. Also it's more of a factor in first time buyers, esp in markets where prices are really high like CA, Chicago or east coast.
 
Posts: 3122 | Location: Michigan and sw Florida | Registered: May 16, 2007Reply With QuoteReport This Post
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We did not pay the buyers closing costs nor were we even asked. Sold within the last 6 months so info is current.
 
Posts: 7032 | Location: North MN & Northern AR | Registered: Oct 01, 2002Reply With QuoteReport This Post
Picture of conrad
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Each market and each sale is variable. We also paid all closing costs when we last purchased. Sometimes a seller will pay certain closing costs, especially if they are personally connected with the financing, as with a builder selling a new home. Occasionally it can be more to the sellers advantage to pay part of the closing costs, instead of coming down in the price to complete a sale.(tax write offs on the sale expenses?)

Some buyers may not have enough extra savings in the bank to cover all the closing costs, but the property and their financing allows a larger mortgage (home sale price), so the seller gets more there to compensate for paying for part of the closing costs.

Each situation can be different.
 
Posts: 9615 | Location: Plains & Mountains | Registered: Jun 08, 2003Reply With QuoteReport This Post
Picture of Jewel
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A strong buyer's market tends to result in buyers asking and receiving closing costs from sellers. The reverse is also true -- in a strong seller's market, a buyer is likely to be told to go pound sand if they dare ask the sellers to pony up closing costs.
 
Posts: 8200 | Registered: Sep 18, 2002Reply With QuoteReport This Post
Picture of real estate lady
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IF they ask you to pay closing costs add to the sales price... if the Realtor says it may not appraise.. wait to see.
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of rker321
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Thanks REL that is a great idea. pay the closing cost but up the sales price.
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of real estate lady
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Right.......by the amount they are asking in closing costs. Make sure your Realtor is up to date on comps. KEY! Drive by
or ask to see the comps, get copies of those listings from your Realtor. Remember comps (are SOLDS/closed)not stuff listed for sale.

Back to closing costs..
If that is not acceptable you could add like $5500
of the closing costs instead of full amount..negotiate. If you feel pressured...stop..and sleep on it. Your Realtor
should give you a NET SHEET on each scenario..what you will receive in you hand at close...if yu pay this amount..etc.

Understand everything always before you sign.

This message has been edited. Last edited by: real estate lady,
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of rker321
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I would like to bring a new aspect of closing costs. I have always wondered as to why closing costs are so high, I know that they very between the States, but could someone here do a break down of what usual costing costs are. I can only see one. title search. but I cannot see any others. Sometimes closing costs are very high. any reason. breakdown please anyone?
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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They can include title costs, any inspections, any credits to buyer if repairs have been negotiated, pro ration of real estate property taxes between buyer and seller, some states and municipalities also require a percentage of sales price to be paid, closing fees for title company, real estate broker fees, if there are any points being paid for mortgage(if you're the buyer or being asked by buyer), any fees paid for inspections of wells and water. Usually total closing fees can amount to 7-8 per cent of sales price. This is just a partial listing of what could be on yours.
 
Posts: 3122 | Location: Michigan and sw Florida | Registered: May 16, 2007Reply With QuoteReport This Post
Picture of rker321
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Closing costs in California were high while in Florida were very low. Still would like to see a breakdown in order to understand those 8-10 thousand closing costs. The buyer pays the realtor fees so why is it included in the closing costs that they say a seller has to pay> What are the closing costs for the seller. how is that closing cost breakdown.

This message has been edited. Last edited by: rker321,
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of real estate lady
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sellers usually pay Realtor in Florida, unless negotiated otherwise.
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of rker321
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I blew it REL I meant to say that sellers pay the Realty fees, everywhere that I know of. so those costs are out of the closing costs right? so besides the title search. how many more costs are attached to those closing costs that the buyer must pay. inspection reports, I can understand. but if there are no problems with the inspection there shouldn't be an issue with any of this. The buyers costs is really what I am most interested in, I see all the time pretty big amounts that are required from a buyer in order to buy a house. What are the most usual fees for a buyer in their closing costs? In previous response, I saw pro ration of taxes, that I can understand. So, as of now I can see. Title search, Inspection report, pro ration of taxes But the amounts that I see published are usually thousands of dollars, why
Just went to the Internet and I Cal one of the highest closing cost are about 2600.00 so why I see all the time closing fee requested by buyer 6,000 8,000? where are they getting these amounts.

This message has been edited. Last edited by: rker321,
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of real estate lady
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6% is a good estimate for closing costs. However,
I suggest to my buyers to get two lenders bidding for their business..and send those lenders each
others truth in lending (estimates). Usually one will give a good break. However interest rate must be lowest possible also.

Alot is escrow acct.(A loan when the bank escrows amounts upfront for tax and insurance One year insurance - real estate tax escrow...

figure 3-4 percent if no escrow.

now is a good time for all to refinance before rates go up...BTW

This message has been edited. Last edited by: real estate lady,
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of rker321
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Thanks REL now I am understanding what means when they say to the seller give me 8,000 in closing costs. wow, that is still a high cost.
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of real estate lady
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Remember sales prices are different, so the higher price of the house the more closing costs. Regardless 6% including tax and ins. escrow is a good estimate. 3-4 without.

As a Realtor I am always haggling over closing costs for my buyers and sellers when I get the hud (closing statement) JUST BEFORE CLOSING..works. Some are fixed however like stamps on the deed, intangible tax..etc. Negotiable items are title insurance, closing fees, mailing fees, course you can call around for best price on survey instead of using whoever the title co. does.
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of real estate lady
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Well, if you ask for closing costs, you want enough in the pot~~ so good to have that estimateof CC handy from the bank or lender at offer time. However if you ask for more than enough - the title co and mortgage co. usually find a place for it, so good to fight
alittle just before closing even if you are a seller paying buyer CC. Best bet is to put "UP TO
$8,000" for example in contract.

Also remember sales prices are higher and lower so 6% of whatever sales price is agreed upon.
Paying closing costs for a buyer is a great negotiation tool, however you can negotiate that
by adding to the sales price, or half to the sales price, for example..or a fraction thereof..

This message has been edited. Last edited by: real estate lady,
 
Posts: 9253 | Registered: Aug 14, 2007Reply With QuoteReport This Post
Picture of Charming
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I don't work with many first time buyers so I have not had to worry about the seller being asked to pay closing costs. Even on a recent VA loan the only extra costs my seller had to pay was the termite inspection and the HOA registration fee of $100.

Sometimes with new construction I've seen the builders offer to pay some costs if you use their attorney. Not recommended, but if the buyer agrees to it - stay on top of what is going on.

Why so high on the buyer's side? Attorney fees, inspections if not paid at time of service, escrow of tax and insurance, bank charges, title search and insurance, percentage of prepaids - taxes, etc.


Fun and Info
 
Posts: 3514 | Location: Coastal SC | Registered: Jan 10, 2006Reply With QuoteReport This Post
Picture of rker321
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So, what you both are saying is that closing costs if they are high, is because the lenders put a lot of costs to the buyer, in order for them to give them the loan. am I right? Because if I am, I am not going to be an easy mark when it comes a matter of those closing costs.
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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I don't think that's the way to look at it at all. Closing costs are very defined as detailed by posts above. Certain costs are born by buyers and other by sellers. The only time lenders add to above defined closing costs is if buyer wants to buy down the mortgage rate and prepays an amount- usually a percentage of total loan. Think you need to step back. If you are buying and have chosen your lender, ask for good faith estimate- they have to detail each closing cost.
 
Posts: 3122 | Location: Michigan and sw Florida | Registered: May 16, 2007Reply With QuoteReport This Post
Picture of Charming
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quote:
Originally posted by mamaspoon:
I don't think that's the way to look at it at all. Closing costs are very defined as detailed by posts above. Certain costs are born by buyers and other by sellers. The only time lenders add to above defined closing costs is if buyer wants to buy down the mortgage rate and prepays an amount- usually a percentage of total loan. Think you need to step back. If you are buying and have chosen your lender, ask for good faith estimate- they have to detail each closing cost.


Lenders are now required to give a Good Faith Estimate and at closing all the actual costs need to be in line with the GFE. That can cause some grief at closing when things change!!!


Fun and Info
 
Posts: 3514 | Location: Coastal SC | Registered: Jan 10, 2006Reply With QuoteReport This Post
Picture of rker321
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What usually are the costs that sellers incur, that are in the closing costs ? Why would they be in the closing costs isn't the buyer responsible for those?
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of aychihuahua
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quote:
Originally posted by rker321:
What usually are the costs that sellers incur, that are in the closing costs ? Why would they be in the closing costs isn't the buyer responsible for those?


From realtor.com: "Sellers typically are expected to pay:

Loan payoff costs, including possible prepayment penalty fees
Real estate commissions to agents or brokerages
Transfer taxes
Title insurance fees
Notary fees
Attorney fees, if they choose to use a lawyer

After an agreement has been reached to sell the home, sellers remain responsible for such ongoing costs as mortgage interest, property taxes and homeowner association dues until the property officially changes hands. If a home inspector finds problems with a house or condominium, the seller may negotiate a credit to be paid to the buyer at closing.
Whether you are a buyer or a seller, make sure you are financially prepared for closing costs. Factor them in when you calculate the price of real estate transactions."
 
Posts: 5289 | Registered: Jul 12, 2009Reply With QuoteReport This Post
Picture of rker321
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Thanks for the breakdown, I can see those costs belonging to the seller, they are acceptable and logical. It is difficult for me as a seller, to put up a home for sale, and then, have to help the buyer buy my home. In my view, they either have the money or they don't I don't mind dropping the price when I am selling, but offering to pay closing costs on top of it, Is to me unacceptable. I realize that there will be times that a seller because of their circumstances will have to accept whatever they have to, in order to sell a home. But hoping that people understand, that buying a home is not trying to rip off the seller, taking advantage of them and think is an acceptable practice. I wish we could all go back when you bought a home you put 20% down and you bought a house with the appropriate loan and your costs included. And if you didn't have the money, it meant that you needed to save some more.
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
Picture of aychihuahua
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I hear you. I have never been asked to contribute to closing costs nor have I ever asked for closing cost help. In fact, I had never heard of this situation except on HGTV's House Hunters...and it was pretty perplexing to me, as a long-time buyer and seller.

It certainly is not the norm where I live, I guess because the homeowners are experienced buyers and sellers, not first-timers.
 
Posts: 5289 | Registered: Jul 12, 2009Reply With QuoteReport This Post
Picture of rker321
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Unfortunately, these programs create the illusion that what they do is the norm, and because so many inexperienced buyers see them, they go out there with these expectations. I believe that, is time unless you have the need to sell the house at any cost. that you stand firm in what you think you should give out in the price of your home. I realize that it depends on the individual circumstances, but, I guess the buck stops with me. LOL

This message has been edited. Last edited by: rker321,
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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Here in CA, you're seeing a lot of real estate agents rebating back a portion of their commission to cover closing costs. Sellers are open to offering buyer credits but as in life, everything is negotiable. Good luck!
 
Posts: 1 | Registered: Feb 24, 2014Reply With QuoteReport This Post
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I agree. Sometimes you have to put clauses in the contract the will require each party to be responsible for their portion of closing costs. Visit www.wholesale123.org for specific contracts and information.
 
Posts: 1 | Registered: Mar 28, 2014Reply With QuoteReport This Post
Picture of rker321
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West, I am going to somewhat disagree with you on your post. closing costs is a negotiating tool not wise to put it in writing as to how much you are willing to give to the buyer. Unless that you want to stand firm in "no closing costs will be provided"
 
Posts: 4999 | Location: 0 | Registered: May 31, 2007Reply With QuoteReport This Post
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