Buyers say "NO" to Closing Costs. What will the Sellers say?

Unfortunately, in our area the buyers have been making ridiculously low offers for quite a while now. So of course, they cannot have it all. But they've been lead to think they can. So they find it hard to believe that they can't have it all. So you hit the nail on the head with that one... and with all the other ones too. Well done!

Hi Christopher and Stephanie - Seller Assist is something we'll see a lot more in today's market and especially with FHA loans that appear to be the way many buyers are going.  I do like a prior comment that mentioned the approach to presenting the offer to the seller; going right to the net proceeds and then discussing seller assist. There are scenarios in this topic that certainly are beneficial to buyers.  On the flip side, I've seen seller assist included in low ball offers that certainly upset the seller from the onset.  Negotiations tend to be tough when the buyer takes an unreasonable approach to making his/her initial offer.

Seller concessions are fairly common here but we often agree to base the commission on the non-assist number. More sellers agree when we give up $ - and they rarely even realize that it is a tiny amount. Great post!

Great post!  No sellers want to pay buyers' closing cost but as you said "You can not take without giving even in a "buyer's market" . Those with Good Will and Generosity are always winners in the end."  Thanks you for sharing this with us.  I liked your 'math'.  I will keep it in mind! 

Although it is illegal to write ANYTHING in a real estate contract regarding commissions in my state, often the Realtors will agree verbally that the Seller will only pay commission on the net amount (purchase price less seller-paid closing costs).

The only problem that we have with the scenario you stated is whether the home will appraise for the sales price amount. We do it all the time, particularly with 1st-time homebuyers. Great post.

As always - "it depends" - on the buyers, the sellers, the appraiser, and the agents. Just another example of the value that realtors bring to the process.

This is something I have to explain to my first-timers every month, so I'm going to re-blog this fabulous post!

Thanks so much...

In our area, I think 95% of the contracts written include seller concessions.  Great post and explanation!

Thank you!

Great post.  I am seeing more and more sellers in my market willing to pay closing costs for buyers in order to get their home sold.  Some listings even include the comment the seller will pay closing costs.  I did have one transaction where the buyer came back and asked for a higher sales price with seller concession to pay the difference between the higher price and original offer in order to assist with buyer costs.  We did include a provision that commissions would be paid on the original offer.  It worked out well for everyone.

Nice Post - 3 quick comments -

1) If I'm representing a buyer and the buyer is asking for closing cost I notfiy the listing agent that I only want to receive sales commission on the net sale price - of course I'm the BIC of my own firm so I dont have to get permission :)

2)  I try to get buyers to think of it as Buyer Financed Closing Cost instead of Seller Paid.

3) I've often seen buyers want to come up with a fair offer and then back out the amount they want in closing cost - to avoid this I try to get them to focus on the amount they want to offer for the house and then add the amount of closing cost to it

I agree with CaryRealEstate.  Wohderfully stated!

Christopher and Stephanie,

I've actually had sellers refuse to help the buyer with closing costs because they think the buyer should be able to afford them if they want to buy the house. As Realtors we work to put the deal together so that both sides are happy, and sometimes that means fees are shifted from one party to the other. However, in this "buyer's market" I've had more than one seller fed up with buyers having everything go their way, and they are digging their heels in the sand! What I've found is that if a buyer really wants a house, they will find a way to pay the fees, regardless of whether or not they thought they could. I don't recommend taking this route to any seller in this market, but some are choosing it and still getting the sale.

Stephanie

Interesting article. . .in the State of Georgia it is "customary" that sellers pay all or a significant portion of closing costs.   Our contracts are written so that we enter an amount (maximum) and if the costs come in under that, the seller gets the difference at the closing table.   There are specific items that can be considered "closing costs" and they are enumerated in our contract.

Sometimes it's a tough pill for sellers to swallow, particularly if they didn't have much equity, or when they didn't have an agent advising them to ask for closing costs when they purchased the home - we run across that alot here when he seller bought new construction.  

I've even had sellers put their foot down on the subject, only to see good offers come in and buyers that walk away.   I'd have to say that in our market, most sellers see the wisdom of making the concession and moving on.

I like the comment, let's not step over dollars to pick up dimes, I will have to use that.

It is easier process if you deal with the bank owned property. I usually get all closing cost that I ask for from the bank.

www.atlantamyhome.com