Buyer wants to buy condo OVER asking price.?

Question

I have a 1 br condo that has been on the market for $169,900 in Southern California. It's vacant and very clean.

I received an offer for $177,000 but the buyer wants me to pay a total of $12,000 in closing costs. 8.25% This price does not include the commision.

The most recent sales (of the same size unit as mine) in the same complex were earlier this year at $173,000 and $177,000. There hasn't been a sale in the complex since May.

So, since the buyer is hiring the appraiser, they may be can get the condo appraise for $177,000 which is what they want to do and have me pay the $12,000. But the price of the condo would go down to $165,000. According to my agent, my final net worth will be $151,000.

I am worried about doing this because it doesn't even sound fair. If they want to pay $177,000 is it going to show everywhere that was the price my condo sold for? I am also wondering about the commisions I need to pay, they might be a percentage of that price.and my taxes too

Answer 1

I agree with the other posts - make sure you COUNTER offer that the RE commission will be based on 165K. The sales contract will read SALES PRICE 177K. If this is an investment property or 2nd home, your GAIN will be calculated using the SALES price.

You can use your HUD1 statement to show you paid the 12K buyers closing costs in addition to yours. Speak to your CPA or other tax professional about the tax implications you would face as a result of the sale - They may advise a 1031 exchange if you plan to re-invest in real estate property and use the proceeds from this sale.

Either way, the condo will be able to appraise at or near 177 based on what you shared (NO GUARANTEE) but then you just renegotiate. In today’s market even CA, take the sale - the property is vacant and NOT Making you any money

Hope this helps and Good Luck

Answer 2

Negotiate with your agent that the commission will be based on your asking price, not the inflated sales price. (The difference in commission for 3% of $169,900 versus $177,000 is only $213).

You can negotiate the other closing costs the same way, for example the transfer taxes, etc. Something like, "Buyer to pay the difference in closing costs based on the sales price of $177k versus $169.9k."

Go for it!

Answer 3

We see this case quiet often. The buyer is trying to build the closing costs for his mortgage and may be other costs into the mortgage. A lot of Realtors agree to calculate their commission on the purchase price deducted by the credit the seller gives to the buyer (in your case 177,000 - 12,000)

Answer 4

This is done all the time. The borrower does not have enough money to pick up the cost of the loan so they are asking you to, to make it fair to you there raising the price. Tell your agent you will only pay 6% of the asking price. I bet they will take it to make the sale.

Answer 5

Negotiate with the Realtor for a lower fee .
Your capital gains taxes will be based on your actual take away , not the sales price .

<

Answer 6

Yeah I agree with her above me. It sounds fairly common. Just counteroffer with something that you consider acceptable, that you think they might be able to do. Or try to split the closing costs evenly.