We found a house we'd like to buy, and offered $270k for it. The seller counter offered, wanting $280, and to close one day (1/31 as opposed to 2/1) sooner. My husband thinks we should counter offer for $275, but ask seller to pay $5k of closing costs. What is the difference? Is there a benefit to having seller pay part of closing, and why did the seller want us to move the closing up just ONE day? Any advice would be appreciated....
2006-12-05 11:04:23 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
sorry, that was $275k, not $175k.
2006-12-05 11:05:21 · update #1
The higher price will not make a difference to you, but it would be a worse deal for the seller as he has to pay the agents. 6% of 275 is higher than 6% of 270. Then there would have to be 5k in closing costs left for them to pick up.
As for as the time difference, it probablly is a deadline to meet for another deal. If he is trying to purchase another home he may need to close escrow on his sale by a certain date. This is really common and nothing to worry about.
2006-12-05 11:24:41 · answer #1 · answered by Ron B 3 · 0⤊ 0⤋
Your husband's counter offer is still technically $270,000 to the seller. ($275k - $5k = $270k) So I don't know if the counter offer will be any better received. As for the seller credit, it depends on your cash situation. If you have plenty of money for the downpayment and closing costs, I would pay it out of pocket, rather than getting a bigger loan and paying more interest over time.
As for the extra day ~ who knows ~ it doesn't matter unless it matters to you.
You are most likely in a buyers market in your town, so how long has the house been listed? How much do you like the house? In this forum, we don't know if you are getting a good deal on the house to begin with, so I would go with your gut feeling and stick to your guns. Good Luck
2006-12-05 21:12:39 · answer #2 · answered by bathagent 2 · 0⤊ 0⤋
In your situation the better offer would be $275k and have $5k credited to closing costs. The main reason is for cash flow. If you are putting 20% down, the difference in your down payment is only $1000, whereas with the $275k offer you will have to come out of pocket at closing with $4000 less!
Also, it is usually a better idea to close at the end of the month versus the beginning, since you would have to pay almost 1 months interest at closing if you closed on 2/1 the way mortgage payments are set.
2006-12-05 20:09:31 · answer #3 · answered by Scott B 3 · 0⤊ 0⤋
You offered 270. Seller countered at 280. You're coming back again at 270.
Negotiating is give and take. If you really don't want to split the difference between the seller's 280 and your 270 (the same as 275 - 5), then give in on something that really doesn't matter too much to you. Maybe the closing date will do it for them.
2006-12-07 16:10:28 · answer #4 · answered by teran_realtor 7 · 0⤊ 0⤋
Your husband is on the right track if you can use that money towards paying down the rate on your loan (talk to your lender about this). The seller nets the same amount either way but if they have a smart agent, he/she will advise their client to accept this type of offer because it make your monthly payment lower, thus making you less likely to back out of the deal.
The change of the closing day could be due to several reasons (maybe they have a schedule conflict with their moving company), it doesn't really matter though. The main thing is if the closing day works out for everyone.
2006-12-05 20:05:36 · answer #5 · answered by royal_fiction 2 · 0⤊ 0⤋
It's $175000 minus $5000 = $170,000! Either way, that's about$100,000 difference in your counter offer! I would come just a wee bit closing ot his offer price!
How it works is, total sales price minus seller contribution. It's still $175,000 just $5000 of it, he's going to use to help you pay your closing cost. Which means, $5000 less from your pocket!
2006-12-05 19:12:58 · answer #6 · answered by ALEGNA 3 · 0⤊ 0⤋