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re: Let's talk closing costs for home buyers
Posted on 3/20/16 at 4:04 pm to fightin tigers
Posted on 3/20/16 at 4:04 pm to fightin tigers
When you ask for closing costs you are just going to drive up the sales price of the house. The seller is looking for certain amount that they want to walk away with whether they pay for closing costs or not.
As a buyer, just look at it as whether you'll want to pay up front for closing costs or would you rather add them to your mortgage. If you have the cash on hand set aside for closing costs, don't ask for them because you want to keep your sales price as low as possible. If you you don't have much cash, which a lot of first time home buyers don't have, you will likely ask for some assistance with closing costs. But sellers don't just hand over money like you think. They are adding it to their bottom line net proceeds.
As a buyer, just look at it as whether you'll want to pay up front for closing costs or would you rather add them to your mortgage. If you have the cash on hand set aside for closing costs, don't ask for them because you want to keep your sales price as low as possible. If you you don't have much cash, which a lot of first time home buyers don't have, you will likely ask for some assistance with closing costs. But sellers don't just hand over money like you think. They are adding it to their bottom line net proceeds.
1
Posted on 3/20/16 at 4:09 pm to dualed
The seller paid all closing costs when we bought back in 2011. It's a different market now, so I'm not sure how common that is these days.
Posted on 3/20/16 at 4:14 pm to oreeg
quote:
When you ask for closing costs you are just going to drive up the sales price of the house.
That isn't necessarily true.
Posted on 3/20/16 at 4:18 pm to 13SaintTiger
When you look at it from a sellers point of view it is.
Say I'm selling my house for 200k but I can't am take anything less than 180k to come away clean. If you offer me 180k and ask for 5k in closing, I'm going to counter back at 185k and stand. But if you offer 180k with no closing costs, I'm willing to accept those terms.
I'll pay all your closing costs as a seller as long as the sales price you're offering is covering that amount. The market really doesn't affect the closing costs aspect. It affects more to how much the seller is willing to come down off of list price. It's up to the buyer as to how that is configured.
Say I'm selling my house for 200k but I can't am take anything less than 180k to come away clean. If you offer me 180k and ask for 5k in closing, I'm going to counter back at 185k and stand. But if you offer 180k with no closing costs, I'm willing to accept those terms.
I'll pay all your closing costs as a seller as long as the sales price you're offering is covering that amount. The market really doesn't affect the closing costs aspect. It affects more to how much the seller is willing to come down off of list price. It's up to the buyer as to how that is configured.
This post was edited on 3/20/16 at 4:28 pm
Posted on 3/20/16 at 4:38 pm to oreeg
quote:
When you look at it from a sellers point of view it is.
No it isn't. Nothing about negotiations in selling or buying a house can be regarded in absolutes.
Some sellers price in closing costs when they put the house up for sale. Some sellers have to eat the closing costs in a saturated market. Some sellers and buyers meet halfway. It all depends on the market, nothing is absolute about it.
Posted on 3/20/16 at 4:40 pm to VetteGuy
I sold a house last year, Buyer didn't ask me to pay closing costs...and I wouldn't have done it.
Posted on 3/20/16 at 4:42 pm to dualed
quote:Depends on the market.
I'm a first-time home buyer. I'm going to ask for the seller to pay a portion of closing costs regardless of which home I choose to buy. My reasoning? They can only say no. I'm the guy with the money looking to buy so I feel like I hold some power.. somewhat anyways.
I just bought a house in north Texas where most nicer houses are on the market 3 days or less. If it's like that, you actually hold very little power, and the seller will just sell the house to someone else for the same price who isn't asking what you're asking.
So them saying no isn't the worst that can happen, you losing the home you want is the worst that can happen.
Posted on 3/20/16 at 4:43 pm to 13SaintTiger
You're missing my point. Let's say in this struggling market you come upon a house listed for 200k and you go in and offer 190k with 10k in closing costs and the seller reluctantly accepts. You, as a buyer, are excited because you got a good price and your closing costs paid. But knowing that, you realize you could have just offered a clean contract of 180k with no closing costs. Either way it makes no difference from the sellers pov. They are getting the same amount on their check at the closing table.
That's a marketing ploy used by sellers to get buyers interested. Just like a flooring allowance or a seller paid home warranty. It's all viewed in the end as a bottom line expense that's solely based on the final sales price the seller is willing to agree to.
quote:
Some sellers price in closing costs when they put the house up for sale
That's a marketing ploy used by sellers to get buyers interested. Just like a flooring allowance or a seller paid home warranty. It's all viewed in the end as a bottom line expense that's solely based on the final sales price the seller is willing to agree to.
This post was edited on 3/20/16 at 4:47 pm
Posted on 3/20/16 at 4:50 pm to shel311
I also sold a house in Florida a couple of months ago.
The buyer asked for me to pay, I think, $2K towards closing. After some negotiations, the sales price of the house was over what I targeted as my desired sales price by more than $2K so I accepted the offer and paid $2k towards their closing.
The difference from this and my post above about buying in North Texas was that it's a different market, and my home was on the market for around 2 months.
The buyer asked for me to pay, I think, $2K towards closing. After some negotiations, the sales price of the house was over what I targeted as my desired sales price by more than $2K so I accepted the offer and paid $2k towards their closing.
The difference from this and my post above about buying in North Texas was that it's a different market, and my home was on the market for around 2 months.
This post was edited on 3/20/16 at 4:51 pm
Posted on 3/20/16 at 4:51 pm to oreeg
quote:
You're missing my point
No, you are missing the main point and what the op needs to know. All markets are different, all sellers are different, there is nothing absolute about negotiations.
This post was edited on 3/20/16 at 4:53 pm
Posted on 3/20/16 at 4:53 pm to shel311
quote:
shel311
Thank you for making my point. The sales price will always factor in on how much closing costs the seller is willing to give at closing.
Posted on 3/20/16 at 5:00 pm to oreeg
quote:
Thank you for making my point. The sales price will always factor in on how much closing costs the seller is willing to give at closing.
It goes a step further. It's the equity the seller has in the house and what his bottom line is that determines how much and what he is willing to negotiate.
Posted on 3/20/16 at 5:04 pm to VABuckeye
That is my overall point. Whether the buyer wants to negotiate for a lower sales price or more closing costs, it's all relative to the sellers bottom line.
Posted on 3/20/16 at 5:09 pm to shutterspeed
quote:
Customary for sellers to pay closing
Wut?
Posted on 3/20/16 at 5:10 pm to oreeg
quote:
That is my overall point. Whether the buyer wants to negotiate for a lower sales price or more closing costs, it's all relative to the sellers bottom line.
Dude, you said
quote:
When you ask for closing costs you are just going to drive up the sales price of the house.
which is not necessarily true. Buyers pay 1st asking price while the seller pays closing costs without any price increase to the buyer all the time. Asking for closing costs won't drive up the sales price in a buyers market.
Posted on 3/20/16 at 5:16 pm to dualed
My house is for sale right now. I would tell you no unless you were offering asking price
Posted on 3/20/16 at 5:27 pm to dualed
Depends where you are at. Houses in my hood have been selling for asking price within a week. IDK why the market is popping right now, but it is not good for buyers.
Posted on 3/20/16 at 5:31 pm to 13SaintTiger
quote:
Asking for closing costs won't drive up the sales price in a buyers market.
Stop thinking in terms of the market temperature for a sec. The sales price and the closing costs amount will always work in tandem. Think of it as a sliding scale. The higher the sales price, the more closing costs a seller is willing to give.
Now the market can be considered as to where the seller wants to set those limits. Even in a sellers market, a seller will pay all closing costs as long as the sales price meets the satisfaction of the seller.
So my point is the market conditions really don't play a part in closing costs. The expectations of the seller as to what they want to net from the transaction does.
Let's say say it's a sellers market and I have two offers in from of me.
A. 215k with 15k in closing costs
B. 195k with no closing costs
Which offer do you think I'm accepting?
Posted on 3/20/16 at 5:45 pm to oreeg
quote:
So my point is the market conditions really don't play a part in closing costs.
You are wrong. Market conditions dictate almost all negotiations, that's pretty basic. Quit trying to teach a class.
Posted on 3/20/16 at 5:53 pm to 13SaintTiger
Always.
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