Let's talk closing costs for home buyers

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Do realtors play a part in convincing sellers to pay a portion of closing costs during a home purchase?

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No, this is being driven by loan originators.

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What? The negotiation for the transaction is done by his realtor if he has one and he can certainly instruct the realtor to attempt to negotiate closing costs paid by the seller into the transaction. The loan officer has nothing to do with this negotiation. The loan officers job once he has the loan is to finance and close the loan according to the terms of the real estate sales contract and the terms of the entity giving the loan.

As long as the house appraises for the inflated price.

Something tells me you don't buy and sell property in the price range of the area I live in.

Sellers want a certain amount of net profit. They could care less how they get there. A house is only worth what it is worth.

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The loan originators are always telling buyers to ask sellers for some or all of their closing cost.

This is a fact

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I've bought 3 houses with 3 different loan originators. None ever cared to ask about that.

Not to derail the topic but the whole home buying process is insanely complex and complicated and I feel its that way just to keep all the nonsense jobs that depend on the complexity. I have a mechanic at one of my stores who has been a mechanic for 40 years and he swears european cars are unnecessarily complex vs american cars bc of the labor unions in europe and the need to have more jobs so they just make the cars more complex so there's more work to be done out there.

I buy and sell more stock than some homes and it costs me under $7. It's ridiculous that it takes nearly 2 months to obtain financing and close a deal on a property and then based on the amount you spend a realtor can make a fortune. The difference between a realtor selling a $10M home or a $100,000 home is basically just your social network. The guys closing $100k homes can close a $10M home if they had those friends, but they don't so I don't see why selling that property is worth say $600,000 in fees, that is just ridiculous.

I hope and pray at some point in my life, Im still in my 30s, that we can simplify the process of buying/selling a home bc no offense to realtors all over, there is just no way these guys are worth the commissions they are used to. Every industry on earth has faced some sort of headwind from technology making it easier/cheaper to use except real estate. I hope we see something soon. When I sold my condo last year my realtor's response was don't worry about the 6% in fees, worry about the 94% I get you.

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I buy and sell more stock than some homes and it costs me under $7. It's ridiculous that it takes nearly 2 months to obtain financing and close a deal on a property and then based on the amount you spend a realtor can make a fortune. The difference between a realtor selling a $10M home or a $100,000 home is basically just your social network. The guys closing $100k homes can close a $10M home if they had those friends, but they don't so I don't see why selling that property is worth say $600,000 in fees, that is just ridiculous.

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Just to make an argument, you could say you are paying that percentage up to those high amounts because that realtor put in the work to create the client list he could call upon to purchase/sell a property.

You'd think there would be some website like "Million Dollar Homes.com" that could replace that, but there's some gamesmanship in selling real estate and attracting buyers.

Fully agree, realtors do work to some extent, but I know myself when Im shopping for a new property, Im doing all the scouring on the MLS and then I call my realtor and have them set up a showing. I don't know many people who call a realtor and say I want this,this, and this find me what you can. We're all so tech savvy today that we can find what we want with ease. Honestly most realtors I meet out in miami the last few years were just gung ho about how real estate must go up bc of all the foreigners bringing money over, well the dollar strengthened and alot of that money quit coming.....now what? Very few realtors I've met are knowledgable about interest rates, the dollar, and where the market is and where its going. The average realtor thinks everythings a good buy, thats why we have some people still underwater from 2005 in some parts of the country.

As others have said, the main reason for seller paid closing costs is because they are $3-5000 for a "starter" home. Someone with 5-10% down on a $150,000 house is looking to need up to 50% more money to buy just to cover closing costs. So the option is to save $10,000 and find someone that will cover closing costs or wait 1 more year to buy and save $5000 more.

To a half brained seller, its all semantics.

a.) Sell house for $155,000 with $5,000 closing costs
b.) Sell house for $150,000 with no closing costs

I'm sure there are idiots that sell the house for $150,000 with $5000 closing costs though .