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Closing costs are going to be part of your transaction when you purchase a home, whether you’re paying cash or getting a loan. When paying cash, the closing costs will be lower. When getting a loan, they’re much higher - anywhere from 5% to 8%, depending on your tax escrows and what your lender is requiring to hold. When you’re making an offer, your overall cost can be quite high after you include your down payment and closing fee.
This is where seller assist comes in. Seller assist can be anywhere from 3% to 6%, based on the loan you’re receiving. Out of courtesy for the seller, if you’re going to ask them to pay your closing costs, you have to look at what their real net sale amount is. For example, on a $100,000 loan and purchase price, if you ask the seller to pay 6% of those closing costs, you’re really only giving the seller $94,000. The seller is more or less gifting you $6,000. Therefore, if you come into that $100,000 purchase and want to offer them $90,000, and have them pay another 6,000
Be kind to the seller. They’re giving you a gift! When you want to have closing costs paid, work with your agent. Find out what the best price is for that home, give the seller what the home is really worth, and get them to help with those closing costs.
If you have any more real estate questions or needs, please send me an email or give me a call.
