Request Sellers Concession For Buyers Closing Costs
Sellers Concession For Buyers Closing Costs Can Cover Most Or All Of Home Buyers Closing Costs:
If you are a home buyer, a down payment on the home purchase can wipe out your hard earned savings. Besides the down payment on the home purchase, you will have closing costs on your real estate purchase transaction. Closing costs on a home purchase will include appraisal fees, attorneys fees, title charges, home inspection fees, title insurance charges, transfer stamps, upfront insurance mortgage premium, prepaid closing costs, and other fees which can accumulate thousands of dollars. Closing costs vary depending on where the real estate purchase transaction takes place. Every county and state have different transfer stamp and intangible tax fees and recording charges. Even if you have the funds to cover closing costs, why not keep those funds for reserves for future remodeling or repairs and have your closing costs covered. One of the most common and popular ways of covering all of your closing costs is through a sellers concession for buyers closing costs.
What Is Sellers Concession For Buyers Closing Costs
A sellers concession for buyers closing costs is allowed for the home seller to contribute towards the closing costs of the home buyer by the home seller on a home purchase. Every mortgage loan program has a different amount of sellers concession a home seller can give a home buyer. FHA mortgage loans allow up to a 6% sellers concession towards closing costs. For example, if the seller wants a net amount of $100,000 for the bottom line when he closes on his house, see if he will take $106,000 and give you a $6,000 sellers concession towards your closing costs so you do not have to come up with any additional funds besides the down payment. The sellers concession can be applied towards any closing costs such as title charges, upfront mortgage insurance premium, attorneys fees, appraisal fees, transfer stamps, and other third party closing costs. Sellers concession for buyers closing costs cannot be used towards the home buyers down payment. Any overages of sellers concession needs to go back to the home buyer and the home seller cannot give a cash kickback to the home buyer. Try negotiating on the best purchase price possible with the seller of the home. Then as a negotiation tool, try to get a sellers concession to lock up the deal.
Conventional Loans allow up to 3% of sellers concessions for primary and second home financing and 2% sellers concession for investment home financing. VA Loans allows up to 4% in sellers concession for buyers closing costs.
Don’t Ask For Too Much Sellers Concession
Do not ask for a sellers concession that is more than your closing costs. On the above example, if you offered a seller a $106,000 for the home and you requested a $6,000 sellers concession and the closing costs totaled only $4,000, the $2,000 left over sellers concession goes straight back to the borrower. A seller cannot give you the left over proceeds of a sellers concession back to the buyer. So remember not to waste the sellers concession.