Is it normal to have the seller pay for the closing cost?

Question

I just had a good faith estimate done for a home loan, the closing costs reach almost $9,744.00!!! My loan advisor told me that the seller can pay the closing cost. Is this normal? Does it depend on how bad the seller wants to get rid of the property?

Answer 1

It is VERY common in this market for a seller to pay all or part of the buyer's closing costs - however, in some states, this is limited to a certain percent of the sale price or a specific amount. It depends on the laws in your state, but you should be able to get the seller to pay a good chunk of it. Ask your REALTOR® for more specific information in your state.

Several years ago, it was not common. Yes, it does depend on how badly the seller wants to sell - and most of them are really motivated these days. However, you could run into an unmotivated seller. Remember, everything is negotiable. If the seller isn't willing to pay closing costs, you can always move on - there are plenty of homes on the market to choose from. As a buyer, you are more in control of the situation than the seller is. That is why they are calling this a "buyer's market".

But remember, there are other out of pocket costs for buyers too. Inspections, earnest money, and appraisals are often paid for by the buyer in cash prior to the sale. So make sure you have some cash on hand. You can expect to pay about 1% of the sale price for earnest money in most areas. Appraisals usually run around $300 - $500 depending on your location and if your state reqiures that appraisers be licensed. Inspections usually run around $200 - $400 in areas where inspectors are not required to be licensed. Keep in mind, these numbers are just to give you an idea and they may not be available in your area. Again, its a good idea to speak with a REALTOR® to find out for sure.

Good luck and happy house hunting!

Answer 2

Yes, the seller can pay most closing costs. Sometimes - I've seen closing costs split more often than any other situation. Yes, it does depend on how bad the seller wants to sell the house. Being a buyers market, you should have the upper hand unless this is in an exclusive neighborhood. I assume this is your first house as well. A couple things - if you plan to pay cash for the house (no mortgage company loans involved), then typically the seller will pay all the closing costs. You can also ask them to split closing costs. Again, in a buyers market, you may get the seller to pay all. Get whatever you can. Good luck!

Answer 3

Everything is negotiable.

When we bought out house, the seller ended up installing a new furnace, a new roof, and a new electric service. The house had been on the market for quite some time, and the owner had died, so the executor was highly motivated.

These days, it's almost impossible to get a home loan, even if you have sterling credit, so it's almost impossible to sell your house. It's a *wonderful* time for someone trying to buy with cash, because sellers are in a bind.

Answer 4

Normally the buyer pays most of the closing costs, but it's negotiable, and not terribly unusual for the seller to pay at least some - and you're right, it depends on how much they want to see the sale go through.

Answer 5

6 months ago not so much, today if the seller wants to SELL their house-more common. So it's worth asking the question. If you use a professional REALTOR they can even go so far as to locate those properties where the seller has already offered to do this. That information is available to us in the detailed MLS information. Good luck with the move.

Answer 6

depends what exactly the 9744 represents. If it's partly escrow for taxes - YOU have to pay that. There are some closing costs the seller is typically NOT allowed to pay. You may be able to get some or all of them included in the mortgage to minimize the cash needed at closing - talk to the mortgage rep

Answer 7

Some closing costs are negotiable, such as realtor's commissions, the loan broker's commission and who pays for certain inspections. But it's typical that the seller pays for the appraisal, title costs, document prep and most of the other closing costs.

Answer 8

Payment of closing costs, specifically non-recurring closing costs, is negotiable. This must be specified either in the contract or the escrow instructions. In your area there might be a customary way of settling the issue, or it might be wide open for negotiations. Examples of non-recurring closing costs are:
loan fees
loan "points"
escrow fee
title search
title insurance
transfer tax.
In my area the buyer usually pays most of the closing costs, but that has been shifting as buyers gain more bargaining power.

Answer 9

Happens all the time. Yes, whether or not the seller agrees depends on how badly they want to sell, and if someone else will buy the property without the $10,000 break.

Answer 10

HA! My "no-cost closing" started at $0 and ended up being $2,000 on a $65,000 home. We had "buyer's concessions", which is where a seller pays the closing cost (it would have been $4500 otherwise, total). What the mortgage companies and realtors DON'T tell you is that there are title fees, title insurance, search and survey fees, lawyer fees, ect. and so on and so on that you must pay. No one pays "nothing" at the signing of a home, that I know of.
I complained to my mortgage company after the sale, because they hadn't been honest with me. People want to know these things up-front!