Closing Costs

Closing costs.  One of the most confusing elements of a real estate transaction because they vary depending on the type of payment (cash vs mortgage) and on any negotiations in your Purchase Agreement.

Often buyers will ask the seller to "pay their closing cost."  That is too vague for me so when I write an offer I spell out exactly what the seller will be paying on the buyer's behalf.  I also point out to the buyer that the seller is not really paying this...the buyer is financing it over the life of their mortgage.  Example:  If a property is listed at $100,000 and the seller would sell for $97,500, they will stick to the list price of $100,000 if they are paying $2,500 of the buyer's closing cost.  Sometimes it works better to have the cost paid and less out of pocket expense at closing and sometimes it is better to have a lower mortgage balance.  Your Lender will give you a detailed itemization of these costs and I will work closely with them to best determine how to craft a purchase agreement to your best advantage.

A buyer can ask the seller to pay these costs on a bank-owned home and if using FHA, VA, or conventional financing.

Let me know if you would like more information or a referral to a great lender that can help you determine your financing options!