If you've bought or sold a home recently, how were your closing costs handled? If the seller contributed, did the seller contribute the full amount, a percentage, or a set dollar amount? I know each deal is different but I'm trying to get a more recent idea, as everything I found on some quick googling was years old.
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When I bought, I was a first time buyer and it was pretty accepted in the price range I was buying in to ask the seller to cover some of the closing costs. But because I was buying a short sale, the bank wouldn't cover all of them (I think I paid half)
I think a lot depends on the market and the price point.
When I sold that house, I covered closing costs because the buyer offered a full price offer and we were eager to sell. And again, it was a first time buyer buying a fairly low price house.
We bought a few brackets up (price wise) in a hot market, so there was no way our sellers would cover closing costs. We ended up paying them in full. But we also needed our offer to be super attractive because we were buying the cheapest house in the neighborhood and were on a time crunch.
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@MaryM: Good to know! We are negotiating a deal without an agent that just sort of fell into our laps. We were planning to list soon and I'm happy to sell the house without having to put it on the market, but want to get an idea of current trends. The buyer asked if we would "assist with closing costs" so I'm trying to determine what would be most appropriate.
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This very much depends on the market conditions in your area. Around here, sellers can pretty much ask for your first born child. We were lucky to buy through a real estate company that covered our closing costs through their commission (like Redfin only double the amount).
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Between my husband and I we have bought 3 properties and sold 2 in the last 8 years...... in all 5 transactions the buyer paid 100% closing costs. Even when we were each first time buyers.
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@PawPrints: It's lower inventory area so I don't think we're in that situation. Good to know!
@meadow: That's interesting! Do you mind sharing what your area is like market wise? Is it fast moving and in the sellers favor in all those cases?
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@Jennibenni: Lower inventory actually helps give the advantage to the seller, but regardless your area may not be tilted that way.
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It is very dependent on your market. There is no average. I would ask for an official offer.
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As both a buyer and seller on all of my transactions, settler has paid full closing costs. I think it very much depends on the market in your area!
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@Jennibenni: 1st purchase... buyers market
2nd purchase ... new construction....wasn't really much discussion or haggling
3rd....sale......property wasn't moving.....had lowball offers....buyer didn't ask & I didn't offer.
4th purchase....... was our forever home...... we were afraid of a bidding war and swooped in with an offer before the open house. We didn't ask for closing costs because seller negotiated us up and would have had no trouble finding another buyer (low inventory of houses of this caliber in the area in the price range
4th.....sale .....quick sale....buyer didn't ask....even though she was so first time home buyer. -
We bought last spring as first time homebuyers and we asked the sellers to pay closing costs. They contributed a set amount, which ended up being most of the cost. Our market wasn't (isn't) super hot, I think.
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@PawPrints: Oh I misread your first comment and thought it said buyers. I agree we have the advantage but it's certainly not an extreme sellers market here.
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We bought 2 years ago and I believe we negotiated that they contributed a dollar amount towards closing.
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In our market, you can only ask for a set amount. We asked for the max we could and "beefed up" our offer. We also got an allowance for carpeting and for repairs.
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We asked the sellers to pay closing costs and they did. I think they were under contract for another house though and unneeded to get out quickly.
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Dollar amount plus they paid a point on the mortgage rate.
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Our closing costs were covered by a credit from the builder (new construction) and our Redfin credit. We actually got cash back at closing.
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In our offer we asked them to pay a set dollar amount that was about 40% of total closing costs.
As for our market- inventory is just starting to pick up after winter (we've been looking since November and there has been very little so far). And I think georgraphically, it's expected to offer slightly below asking price- and counter as needed. -
@Jennibenni: if you are negotiating without an agent I would offer to split the closing costs 50/50 with them. That would make them feel like you're working with them, therefore helping the deal happen, and paying half their closing costs is likely less than paying commission to an agent if this deal falls through and you have to list.
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@Truth Bombs: Thank you, that's helpful!
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I'm a real estate attorney and who pays which closing costs is usually dictated by your local customs but anything can generally be negotiated. Your title insurance company will likely be able to provide you with an estimate of those costs and the the general amounts (based on your purchase price) and then you can decide which, if any, you'd like to cover.
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Buyer pays for closing costs. You can negotiate a Seller Assist to help defray them- usually in the area I work in (major city with a pretty hot market) the property sells at or close to asking and then sometimes there's a Seller Assist of 5K-15K, versus the property going for 5K-15K less than asking and the buyer having to cover the costs out of pocket, on top of the (traditionally 20%) downpayment.
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When we bought in a competitive real estate market (every decent house getting multiple offers and having bidding wars, etc), buyer paid all of the closing costs. Asking for the seller to cover any of that would mean you would lose out on the bidding war.
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