Berated by Real Estate Agent: Suggested the Seller Pay Closing Costs

Real Estate Broker/Owner with Kristen Correa Real Estate & Reedy Creek Realty Services 0514644

By: Joe Petrowsky in CT - Refer to his original post to comment.

Closing Cost. Who pays? Typical in Texas is:

Seller has their closing cost like brokerage fee (approximately 3-7% of sales price, depending on agreement with listing broker and/or buyer's broker) and then title policy is common (negotiable between buyer and seller and less than 1% of sales price, but is commonly a seller expense) and then they usually have escrow fee, doc prep fee and a few other county filing and miscellaneous fees.

Buyer usually has the cost associated with their loan like the loan origination fee (approximately 1-2% of the loan amount), their title fees (many of the title fees are split in half between a buyer and seller in a Texas contract) and then the buyer usually has to pay insurance for 1 year and usually put some taxes in escrow. Survey is negotiated between a buyer and seller. Appraisal is loan-related and usually a buyer expense.

It's common, however, for the buyer to have down payment (generally 3-20% of purchase price) in reserves to buy a home, but to need help with their closing cost. Help can come in many fashions, but what is super common is for the seller to pay the buyer's closing cost. In about 3/5 to 3/4 of the deals in Texas in the more economical priced homes (especially FHA and VA home loans) and it's even common in the $200s $300s and $400s home sales to include seller paid buyer closing cost. It becomes less common the higher priced the home, in my market.

Point is, it's common. Knowing HOW common can help a negotiation. When I pull sales comps for buyers and sellers, I do not pull sales prices alone. Nor do I solely focus on size, number of bedrooms, number of anything physical to the home... you also have to look at days on market, and, you guessed it, how common is it within the comparable sold homes is it that the seller helped the buyer with closing cost? I think that sets realistic expectations for the seller or buyer to pull those figures.

Original content by Joe Petrowsky NMLS # 6869

“Berated by Real Estate Agent for Suggesting the Seller Pay Closing Costs”


I did a preapproval recently for a veteran. He came back from Afghanistan and immediately went back to the job that he left prior to being deployed. 


One of his goals upon return was to purchase a home for his family. Even though he was well qualified, he had very little in the way of savings.


putting the pieces togetherWe went over a comfortable monthly payment, which was near what was being paid for rent. He told me that his mom had given the name of a real estate agent that was working part time, but he felt obligated.


I did a preapproval for him and included that they were looking for the seller to pay for closing costs and also referred a home inspector, attorney and insurance agent.  


The following day I got a call from his real estate agent, asking me what right I had to put into a preapproval that this buyer wanted to have the seller to pay the closing costs. I probably would have talked the issue through with her, but when she said that guys like me caused the entire subprime fiasco.


I told her, I didn’t realize that I had that much power, which totally put her over the edge. Not sure what else she said as she was hanging up on me.


I got a call from my client shortly thereafter asking me for a Realtor referral. He told me that the real estate agent went off on him, after she got off the phone with me. I’m sure that conversation didn’t last long.


The issue of seller paid closing costs has been around forever. Market conditions and area will dictate what is possible. Is it always possible, absolutely not, but my preapproval has to be based on the needs of the buyer/borrower.  


image courtesy of arztsamui/

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294


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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Posted by

Kristen Correa Real Estate

Comments (3)

Richard Wilson
Cherry Creek Properties, LLC - Colorado Springs, CO
Town or Country, in Colorado, we do it all.

We have an obligation to represent our clients to the best of our ability.  That includes all the options that are available to them.  I understand that low and nothing down payment played some part in the market collapse, but other factors also contributed.  If closing costs can be paid by the seller, and the seller agrees,  and the lender agrees, so be it, it is not some agents place to comment.

May 06, 2013 02:33 PM
Mark Ferguson
Pro Realty - Greeley, CO

Wow, sounds like she had other issues besides hating seller paid closing costs. 

May 06, 2013 02:55 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Thank you for the re blog and your comments. Every market is certainly different and sellers paid closing cost might not happen, but in my particular situation it was the right solution for my VA client.

May 06, 2013 07:34 PM