Is there anything wrong with Seller paying 50% of buyers closing cost?

I also work with lot of VA buyers.  We generally put the exact amount and language that it be credited at closing to be used at buyers descretion per VA guidelines.  Then we do not get bogged down with what it is specifcally used for and there is no gray area in concerns to the amount.  I have one now where the buyers agent tried to get to fancy with the language and restricted the use too tightly and now their lender rejected the credit.  We have to go back an fix it,

We do a lot of concessions and I am with you. I'm a bigger fan of a specific number. 

I've seen this percentage business cropping up in our market over the last couple of months.  My response is always no, give me a dollar amount.  Who do these people think they're dealing with? LOL

Well, yes, and this includes paying "up to 3% towards buyer's costs" for example.  Any good listing agent will prepare a seller net sheet for each offer.  If you can't give the seller a net amount (or close estimate) then how are they supposed to know (what their net will be) and the buyer's agent needs to write in all that can be covered.  If they simply write in "Seller will pay $5000 towards buyer's closing costs" the buyer may not receive the benefit of the full amount and the seller may retain the balance.  It's best for everyone to have figures in a contract.

Agreed, put exact wording in place to cover the seller but accomplish the goal!

This is good advice for home sellers. They will be in good hands when they select you as their listing agent.

I agree and in the past I would always write (if buyer agent) or counter (if listing agent) to say "up to a specific amount toward prepaids and closing costs.  They are not always one in the same.  However, we just had an update in our purchase forms that clarifies that now so it is already spelled out. 

I could envision a buyer - paying excessive points to buy down a rate if the seller was kicking in a percentage rather than a fixed dollar amount ...I'm with you Scott.

Not just a percentage but I also don't like when they just check off certain costs for the seller to pay. If I don't have your buyer's GFE I can only estimate these costs. This was a big issue when I sold REO as the asset managers always wanted a dollar figure on costs. I'd always counter with

The following costs are considered buyer's costs (then I'd list them)

The seller agrees to pay, at closing only, a maximum of $XXXX towards buyer's costs.

Avoided any confusion and surprise costs at closing.

Here we use a rule of up to 3% of the purchase price and typically it is included in the offer as in the offer is full price or more. We talk NET and back into it.

A seller has to have a concrete number to work with.  As Cindy Jones already said, we often see a percentage of the sales price as a request for closing help.  At least we know what that number is.

We are in agreement as to the value of the concessions and how it is to be applied down here as well.  In some contracts it is limited to 3% of costs, especially with the short sales.

Seems as though we are all in agreement.  Protect your seller with a specific amount or a 'not to exceed' amount.  Great, informative post!

Exatly, pin it down and make it clear in the contract.  never give anyone a blank check.  The buyer might decide to spend as much as he can buying down the interest rate and shove so much crap into closing it could cost a fortune.

I've seen offers with over asking price offers with wording that says the seller provide a concession of up to $X for closing costs and prepaids Scott Godzyk 

It is standard in our market to have the seller pay up to X% (typically 3-4%) of the sales price. It constantly amazes me how many agents do not prepare their sellers for these fees. I recently checked with representatives of most of our local title companies and asked what percent of sales with in a certain price range (the most popular price range) included these concessions and I got a resounding 90% or more. This means our comparables have closing costs paid by sellers rolled up into them. We do a great disservice to all parties involved if we don't prepare our sellers for these fees in advance. I recently had a FSBO who was closing his own sale and purchasing from me and thought he was only paying 3% of buyers closing costs, not 3% of the sales price towards closing costs. He was left with far less in proceeds than he expected. If he had used my services or the services of a real estate professional he would have understood or negotiated differently. I heard later on that he was in a deep depression for a long while because of this. 

Had  buyer recently and at first the seller wanted to counter the offer, thinking it was too low. but my buyer paid his closing costs and asked nothing else of the seller. There were no lender required repairs needed. He just wanted to get into the property and done. He did that with all properties he purchased. When I write up an offer a buyer wants to present we always put down a certain amount. Percentages just vary cost too much. Get that solid number in writing.

I also agree with having a sellers defined closing cost contribution if necessary, however, what criteria are you using to define the best, the right, the better agent?

Many agents advise consumers to choose these factors, yet, most don't propose how to choose. So, how do you quantify yourself as being the best agent compared to the rest and where would consumers get that information to validate your esteem? 

It is always a good practice to be clear in what you are asking a seller to pay. In our area we use the terminology of Seller agrees to contribute (a percentage or exact amount "not to exceed") to buyers closing costs and/or prepaids at closing.

I prepare my sellers at the beginning that buyers are asking for sellers contributions to help with closing costs.  FHA and VA allow up to 4% contribution.  I have had buyers ask for up to 6% depending on the financing buyers are getting.  Usually sellers don't want to do this but want there home sold.  This can be worked out by adding the concession to the purchase price.  Sellers home in the end its what they decide.