Any suggestions on what to expect as a buyer of a home regarding closing costs? What should I expect from the seller in this local market....Should I require the seller to contribute the "standard" 3% of the home price towards the closing costs? Thanks.
Comments ... #
I think you can certainly ask, but given the market you may have a hard time getting the seller to contribute towards closing costs.
Amount will vary but a lot depends on price of house and if you are paying cash or financing it.
The buyer and seller both pay some fees. In a typical real estate deal if there is a realtor(s) involved the seller pays the entire commission on both sides so if you have an agent and the sellers have a different realtor listing it, the seller pays the commission to both agents.
It will probably close at a title company and they will figure all the fees. The seller usually pays the title search fee and part of the owners title insurance premium which is based on the sales price. If there is a mortgage the lender will require additional title insurance and the buyer is responsible for the cost of that. There's a closing fee to the title company and usually split between the buyer and the seller and if there is a mortgage involved the seller may be stuck with an additional charge due to the extra paper work.
There's a conveyance fee of $4 for every $1,000 of the sales price paid by the seller.
If you have financing there are going to be a lot of fees you'll have that the lender should disclose up front like an appraisal, processing , recording fees of the mortgage, the credit check, and I've seen some lenders charge some large loan origination fees. Depending on rate, your credit score and lender you could be charged points (1 point is 1% of the total mortgage amount) that is charged up front at closing. Usually the buyer is responsible for all those charges but you can have your realtor negotiate some of the closing fees being paid by the seller in the purchase contract.
We sold our home in 28 days on Zillow without a seller's realtor. We had an open house and showed the home ourselves. The buyer offered $4,000 more than the asking price because we agreed to pay the first $4,000 in closing costs.
They effectively financed $4,000 in closing costs.
We also paid a 3.5% commission to the buyer's realtor. The home was sold FHA. It had a clean FHA inspection as well as a private inspection. We made no repairs or repair concessions. It appraised by FHA at the higher price.
Its a seller's market. Take advantage of it.
I bought a home last November; seller paid 3% towards my closing costs. Working on selling an investment property right now, buyer has asked me to pay $3,000 towards closing on a $200,000 house. Both of these transactions had purchase price at asking price. I think it is very common for seller to pay for closing costs as long as the net cash to the seller is where they want to be. House obviously has to appraise right to make the transaction work.
Nothing more to ask. Most offers I see are coming in at asking/sometimes slightly over with 3-4% of seller concessions.
I always call and ask the lender, how much they actually need versus a percentage. For example a $200,000 house doesn't usually need 6-8k in closing costs, they may need $4,500. So I would counter full asking or slightly over with the closing costs of $4,500 versus a percentage.
Also, most conventional offers won't ask for any closing costs (buyers putting down significant down payment and don't need it like an FHA or VA borrower putting down the minimum.) They also don't have to pass FHA inspection, and can close in 30 days or less instead of the 45 days FHA buyers ask for. So if you get a conventional offer I would jump on it.
The entire transaction boils down to the fact that there's money in the air, and everyone wants as much of that money as they can grab.
Since the seller is the one walking away from the table with deep pockets, typically the seller gets the shaft. However, given that the real estate market right this very minute favors the seller, the shaft in question may be a bit smaller than the standard issue, and KY-Jelly might be substituted for the more traditional bucket of sand.
I just went through this process as the buyer, and I unashamedly gave the seller a rough bit of the hose. I was paying cash, and I used that to my advantage. Now I'm the seller, and when my realtor was confronted with a list of demands from one potential buyer, he blithely informed the malcontent that we had three other offers, one of which was the asking price.
The thing to keep in mind when you're buying is that closing day is everyone's payday - except yours. Play the hand that's dealt you, and do not be afraid to fold. There are other houses.
Seems like it is a seller's market all over the Black Swamp, except in the city of Toledo. That's a double whammy if you are looking to move out to the 'burbs from the city proper.
Ace_Face, it depends on the part of Toledo.
If it's downtown it is also a sellers market. Residential real estate downtown sells very fast. Right now the only two places available downtown are two condos at River West and neither has been listed very long and the one is very overpriced IMO.
A couple I went to high school with are recent empty nesters living in Sylvania and want to move downtown and have been looking since November. Whenever anything goes for sale it gets bought right away. They did offers on two different condos downtown this year for list price and both times got outbid.