We received a less than asking price offer. The buyer is requesting $5k toward closing costs. If this is something as a buyer you have done before please advise if this was just a nice-to-have/ request or something you really needed to buy your home? TBH, I’m turned off by the request and trying to figure out if I will keep closing costs in the counter offer or not.
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I don't know if people weighing in on whether they could afford an extra $5K on a house will tell you anything about whether your buyer can.
We've put that in an offer before, it's just another way to lower the price/costs. Sometimes people are more receptive to an offer packaged that way, but really, it's just another $5K you won't get. I'd feel like it's a sign that there are going to be some pretty big credits requested post-inspection, but there's also no way to know that at this early stage.
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It was my understanding that if you didn't have enough cash to cover the closing costs, you could increase your mortgage loan total to cover them. So, they are really just asking for $5k off the total cost.
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We've purchased two houses. With our first - we were 24 and 25 and didn't have a ton of cash at our disposal. We could afford the down payment and mortgage but really needed closing costs covered in order to have enough money to furnish our home. It would have been a deal breaker for us.
We're in the process of buying our second house and are fine to cover closing costs this time around. We aren't requesting that the seller pays.
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@Lahela017: This is exactly what we did.
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Agree it’s a common way to just lower price indirectly.
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@shabang: agree, I’ve aleo asked my realtor the same question for her to feel out the situation with the other realtor. My husband and I are trying to assess the situation and asking HB makes me feel a little more proactive about it.
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It is VERY common in my area for seller to cover closing costs. And it def is a way to get a lower price w/o offering you a lower price so I think people think it looks better. I’ve also had our mortgage company cover closing costs once so maybe that’s something to explore
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As a first-time homebuyer, we offered *above* asking price, but also for the seller to cover closing costs. This helped us with transitional costs and didn't hurt the buyer at all. My realtor said it was common for my area, and common for first-time buyers.
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@DesertDreams88: they are not first-time home buyers. Their offer is contingent on their home closing, but that’s pretty much a sure thing.
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They offered below asking and they are asking for $5k to cover closing costs? Did I get that right?
As buyers, our sellers didn't cover any closing costs. We just offered less.
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Usually the seller covers closing costs or atleast the bulk of it.
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@Mrs. Lemon-Lime: if it's a contingent offer, AND they want you to pay closing costs, AND they are offering a lower price than asking---then you just need to sit with your realtor to analyze your market and your house and see if your asking price is out of line, or if their offer is out of line.
If their offer is a low offer for your market, but you want to play ball, I would counter with asking price + you pay closing costs (this means you are getting asking - 5k, so again, I would only do that if your market makes that seem like the right overall price). If it's a contingent offer, they are probably cash poor until their house sells and maybe only have enough $ to make the lowest down payment. But that's not your problem really...unless you don't have any other offers and your realtor thinks this is the best it's going to get. Then, it kind of is your problem.
Hope that makes sense, and good luck!
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@looch: yes, they offered $15k below asking + $5k in closing costs + want a home warranty + some personal property.
@Anagram: when I looked at all the comps during the 3 realtor interviews (they each used different comp parameters) I went with the one I realtor I thought understood the competition best, but pushed back on the price. She wanted to go higher and I wanted to have a reasonable list price that didn’t have to be reduced, which is very common in this particular market- all three said that was their strategy. One of the realtors who showed the house to a buyer provided feedback and said we got our list price right. My realtor advised we could go aggressive with the counter and suggested taking just $1,500 off asking and still give them the $5k closing. Their realtor advised they have a back up if their current offer doesn’t go through.
Thank you!@Mrsbells: where we moved from asking for assistance with closing costs was unheard of. My realtor said it’s common in this particular market though and even on 900k/ $1M homes it’s not unusual to see $15k in closing costs requested.
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In my area, some portion of closing is expected to be covered by the seller, but you don't low ball and ask for 5k.
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We have done this on past offers but it was just barely post-housing slump/recession and we were following advice from our realtor that it was common in the area. We were never successful in getting sellers to see it our way. Ultimately the most valuable contributions from the seller came when inspection items were found. The house would have been less sellable if the seller hadn’t done the repairs (and the seller would have had to disclose).
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@Mrs. Lemon-Lime: yeah it sounds like it depends on the market. Hopefully with your realtor you can figure out of their offer is just too low or not.
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We asked for closing costs when we purchased, but it was back when it was a buyer’s market and that was pretty standard.
From what you describe, it sounds like they’re really lowballing and I would definitely counter.
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Happy to report we just cleared the first hurdle.
Appreciate the feedback because I felt more confident holding firm during my counter and declining to counter again. List price + $5k toward closing. DH is of the belief since they asked for closing costs they must need the cash and we couldn’t do the deal without it. Wish us luck we make it to closing with smooth sailing.
Thank you!
Appreciate the feedback because I felt more confident holding firm during my counter and declining to counter again. List price + $5k toward closing. DH is of the belief since they asked for closing costs they must need the cash and we couldn’t do the deal without it. Wish us luck we make it to closing with smooth sailing.
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