Paying Buyers Closing Costs
Paying Buyer's Closing Cost -- Why Not?
People have varied reasons for selling their home. Whether it’s because of an upgrade, a downsizing or a necessary move, the ultimate goal is to sell at the highest possible price in the desired time period. But there is more to selling a home than just putting a “For Sale” sign up in your front yard.
A real estate expert who has experience and knowledge of the market trends in your neighborhood will be able to help you realize your goal of selling our home for the beat price in the right timeframe or your needs.
Mike Kish is an experienced realtor in the Temecula Valley and North County San Diego. As your listing agent, his first priority is to determine the value of your home. With his help, you can price your residential property at or near market value, with some leeway for negotiations.
Realistically, you should expect the majority of offers to be lower than your asking price. Some buyers may even ask you to pay the 3% closing costs. Is it advisable or not? Read on to find out.
What are Closing Costs?
Before deciding whether to agree to shouldering the closing costs (or not), let’s discuss what these are. Essentially, closing costs are the set of fees that a buyer pays when he buys a home. The fees include:
Other costs paid out to transfer ownership of the home and when taking out a mortgage.
Looking at these fees, you can easily say that these are not really the seller’s responsibility and he is absolutely not compelled to pay the buyer’s closing costs.
However, offering to make a concession with regards to this may be a good move when selling your home. Often, in exchange for this rebate, buyers become reciprocal and offer a higher price for your home.
Why Should You Do It?
You Improve Your Chances of Selling Your Home Faster. In the real estate game, having your home sit too long in the market is not a good thing. This gives the impression that something is wrong with your home and you might have to lower your price just to have it sell.
Certainly, you would want to sell at the soonest possible time. Especially if you have already purchased another home, you may find yourself still paying for your old one while already starting payments on your new mortgage.
Staying inflexible about paying buyer closing costs could cause interested buyers to just walk away simply because they could not afford both down payment and closing costs. If this happens often enough, you might find your home sitting longer and longer in the market. And this is not a good thing.
You Create a Larger Buyer Pool. Having more people interested in your home is always a good thing. However, not all people will be able to afford the down payment, as well as the accompanying costs associated with the sale, at the time of the purchase. Offering concessions toward closing cost can attract those who are earnestly interested in buying but have only enough funds for the down payment.
You May Have Higher Price Offers. Being flexible on closing costs becomes a win win situation when an interested buyer puts in a higher offer in exchange for the seller shouldering the closing costs. You are able to sell your home in your target time period, at a higher price. And your buyer is able to purchase your home without worrying about closing costs.
When Should You NOT Do It?
While offering to shoulder the closing costs may have many benefits, it is also important to look at the prevailing market conditions in your area to see if it is really beneficial for your situation.
In a sluggish market, offering concessions towards buyer’s closing costs can sweeten the deal and help your home sell faster. However, this might not be a wise move when the competition for homes is high and the inventory is low. In this case, it would just be foolhardy and unnecessary.
Call me Today - I’m Always Happy To Answer Questions
If you are considering selling your home and need help on maximizing the potential of your property, reach out to me today.
Tags: closing costs, home buyers, home sellers, home buying, buying a house, buying property, selling property, home sales, real estate expert, appraisal, title insurance