I just received an online inquiry where a prospective buyer said he was interested in buying a home, but asked if a seller would pay closing costs. I thought it would be useful to share here.
Dear Client X,
We can include seller paid closing costs in the offer, but negotiation is done with contracts and each contract/offer has a number of variables a seller considers. Some have to balance others to create a well rounded offer. The main points a seller considers when reviewing offers are:
1. The purchase price – current market data shows offers very close to asking price are accepted.
2. Closing date – how fast you can complete the transaction. Cash can close in a week. For loans, we currently write the closing 45 days out, but some can close in 30 days.
3. Strength of the financials – the amount of the downpayment, type of financing, and lender opinion of your file. Cash is king and reduces closing costs, time and removes some contingencies. The proof of funds (if paying cash) or a preapproval letter are required to be presented with the offer/contract. Proof of funds can be a bank statement or letter from the bank. The preapproval letter is a form from the lender stating you are preapproved a loan. Larger down payments usually indicate a stronger candidate. Some loan types are preferred over others.
4. Amount of earnest money – this is typically a 1% pre-down payment to show you are serious about the offer, and credited back upon closing. This is a security deposit for the deal and can be lost if the buyer exits the contract outside of predetermined windows.
5. The length of contingency/option periods – The option period is typically 7 days and $150 to purchase time at the beginning of the contract (often credited back on closing) to get the inspection. This also enables a buyer to back out, and forfeit the option money but saving your earnest money. The financial contingency is the amount of time we write in to get the loan from preapproval to approved status. If the loan is not approved this enables a buyer to get their earnest money back.
6. Requested concessions – Closing costs, home warranty, title fees, and any requested repairs also weigh in.
This may be a lot to absorb, feel free to reach out with any questions and we can discuss next steps.
Real Estate Agent + Residential & Commercial Investments
Keller Williams Realty (512) 743-7885
Mobile App: http://app.kw.com/KWCRD6X
CMA: Home Market Value Tool
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