Use seller paid closing costs to sell your home faster. 

Minneapolis, MN: The real estate market has changed very dramatically the past few months as mortgage interest rates took a big jump, slowing down buyers and removing a lot of the crazy multiple offers being made.

As homes are taking a while longer to sell, common tips that simply disappeared the past few years are coming back. Here is are some great tips for selling your home faster by helping the buyer.

What Are Seller Paid Closing Costs

Simply put, seller paid closing costs help buyers, and that helps you, while generally not really costing you anything.

Don't drop your homes selling price, instead offer to pay some or all of the buyers closing costs. A $10K price reduction may save the buyer $30 or $50 per month, but $10K in seller paid closing costs reduces the buyers out-of-pocket expense by $10k. That is a lot, especially for first time home buyers, who are typically strapped financially to come up with both down payment and closing costs in the first place.

If the buyer is using a no down payment loan, like a VA home loan, or a USDA rural housing loan, with the seller offering to pay some of the closing costs, these buyers can many times buy with little to no out-of-pocket costs!

Another tool with seller paid costs would be that the buyer could use some of these credits towards buying down their rate could potentially save them $200-$300 per month!

It Doesn't Cost You Anything

As a seller, this tool doesn't really cost you anything.  Assume you want $400,000 for your home.  You list it at $412,000 and offer to pay 3% of the buyers closing costs ($12,000).  You wanted $400,000, you got $400,000 in your pocket. You didn't lose anything.

Assume you want $400,000.  You list it for $400,000.  The buyer offers $412,000, but wants you to pay 3% ($12,000) in closing costs.  You didn't lose anything.

Assume you want $400,000 for your home. It's sat on the market, and you talk with your Agent about lowering the price to $380,000. Pretty good change you may not need to if you offer to pay up-front some of the buyers closing costs.

All win win for both you and the buyer.

Listing your home with an offer of seller paid closing costs RIGHT IN THE LISTING may help it move faster as buyers factor this information into their decision before even making an offer, knowing the numbers on your home are more attractive than the similar home down the street. I of course am not saying your home won’t sell otherwise, I'm just saying that this tip might help it sell quicker and keep you from doing a price reduction two or three times.

Seller Paid Closing Cost Limits

The amount of seller paid closing costs mortgage lenders allow sellers to pay on behalf of the buyer varies by the type of loan the buyer is using.  The most common loan, the standard conventional loan, allows for the seller to paid up to 3% of the purchase price with under 10% down, but up to 6% of the purchase price with more than 10% down.

• FHA allows up to 6%
• VA allows says 'all' reasonable costs, but going over 4% is usually moving into the problematic area
• Conventional investment properties is only 2%

Get Pre-Approved

Just like you want to know any buyer of your home has qualified for financing, you need to do the same too.  The earlier in the process the better. The fully licensed home loan experts at Cambria Mortgage, the Joe Metzler Team are here to help.  We lend in MN, WI, IA, ND, and SD. Call (651) 552-3681 to get started, or just APPLY ONLINE.

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Cambria Mortgage, the Joe Metzler team, lends in Minnesota, Wisconsin, Iowa, North Dakota, and South Dakota only.

Equal Housing Lender. NMLS 274132, 322798.  lends in the following states: MN, WI, SD, ND, IA, This is not an offer to lend or to extend credit, nor is this a guaranty of loan approval or commitment to lend. The information here may not be up-to-date and may no longer be accurate. Products and interest rates are subject to change at any time due to changing market conditions. Actual rates available to you may vary based upon a number of factors. Consumers must independently verify the accuracy and currency of available mortgage programs. All loan approvals are subject to the borrower(s) satisfying all underwriting guidelines and loan approval conditions and providing an acceptable property, appraisal and title report. (C) 2022 Joe Metzler