The closing cost of a home can range from between six to ten percent of your home’s total cost. This amount includes everything from real estate agent costs, to getting an inspection, to even covering local taxes and lenders’ fees. Although this high cost is usually placed upon the buyer of a property, there are several situations where the seller will pay for them or even split them with the buyer.
Mortgage closing costs are fees and expenses that you pay in addition to your down payment when you secure a loan for your home. Those costs may include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed recording fees, and credit report charges.
Here are the top moments that can happen!
It’s A Buyers’ Market
A buyers’ market is when more sellers are on the market than people looking to purchase a home. This lack of need means that houses can sit for sale for months, or even years, sellers become desperate. Instead of letting their home sit there even longer, keeping their money tied into it, some sellers will agree to cover the closing costs as an incentive. Many first-time home buyers don’t have the upfront capital to cover closing costs, so having them taken care of will make them want to buy.
The Seller Is Highly Motivated
A seller can be highly motivated by several things. Whether it’s because they have a job in another state they’re trying to move to or need the money to cover a new property or medical expense; they could be desperate to sell. If their property has been on the market for an eon, or they’re in a flood plain, that can all add up into them trying anything to sell. It doesn’t matter if covering closing costs adds a lot of spending to their seller closing costs calculator; often, it’s worth it for them.
Something Came Up In Inspection
After an offer is accepted, the buyer will have an inspector walk through the home to ensure that no insect or weather damage could be costly or hazardous down the line. If any trouble comes up in the inspection, a home seller will often offer to cover the closing costs to make up for this and hopefully push the shopper into buying.
Updates Are Needed To Property
Often, if a property is for sale but needs updates, buyers can ask for the sellers to either make these updates or cover the closing cost. This bargaining piece ensures that the buyer gets to have that update taken care of. If the seller either doesn’t want to invest the time and work into the update or doesn’t want to deal with it, they’ll often turn quickly to covering the closing costs to get it over with. After all, why fuss over a broken fence if you’re waiting on a couple hundred thousand dollars to hit your bank?
Overall, there are plenty of reasons a seller may cover this fee. Everything from using it as a bargaining piece so they don’t have to do repairs before leaving the property, can be seen as viable. If you’re buying a home, don’t be afraid to push back a little and try to save some money!