It is the listing agent’s job to be sure their client is acting in their own best interests. A failure to clearly explain why an offer achieves their goals can end up costing that seller tons of money. When representing the buyer in a transaction, I have on numerous occasions had to explain this concept to the listing agent:
“I will not pay the buyer’s closing costs.” Many agents have heard that line. The next statement from this seller would typically be, “I will not sell below X dollars.”
Well, what if the buyer is willing to pay more than $5,000 more than X, but needs $5,000 in closing costs in order to secure the loan. In this case, the seller is getting what they want in terms of sales price, but possibly unwilling to let the buyer get what they NEED.
If the seller would focus instead on their net offer and also show an interest in meeting the needs of the buyer, everyone wins. Let’s turn this into a simple math equation:
S – C = N
Sales Price = S
Seller’s Contribution to the Buyer’s Closing Cost = C
Net Sales Price = N
What I don’t understand is the seller that is unwilling to get what they want simply because they don’t want someone else to get something. Many sellers would walk away from a deal that meets their needs only to make sure the buyer isn’t getting something they need. And many times I have seen houses sit on the market for months and months costing that very same seller way more than C (the requested Seller Contribution).
I try and get all of my sellers focused on the "net" offer... meaning that if the offer is for $200,000 and the buyer is asking for $5,000 in closing costs, we really have a net offer of $195,000. Sometimes that $5,000 is in there as a negotiation strategy, sometimes to help the buyer's immediate cash flow, and sometimes that buyer needs the money or they will not be able to close. BUT, it doesn't matter... focus instead on the net offer and counter or accept the offer accordingly.