So you have found your dream home and want to make an offer, but you would really like to have the seller pay the closing costs without spooking the seller and end up possibly losing the home you have fallen in love with. The easiest way to achieve seller paid closing costs is to construct your offer is such a way as to make sure the seller does not lose any money despite paying these costs.
We all know closing costs are a regular part of every home purchase with the costs typically going to things such as prepaid taxes, homeowners insurance, inspection fees, origination of the loan plus other fees and sellers are allowed to pay the closing costs as well as up to 4% of the concessions which are things of any value outside the original costs, such as any of the prepaid expenses mentioned above and any collections or liens the borrower may have.
Getting preapproved for a loan is an important step to being able to construct a good offer. Not only does being preapproved give you an estimate of the closing costs, it also allows you to know how much money you will need to bring to the table at closing.
Here is how to construct an offer that will possibly get the seller to pay the closing costs for you. As an example let’s say you are preapproved for up to $225,000,so your closing costs on this amount is roughly $4000. You find a home that you love for $230,000 and you start the negotiation process. The seller ultimately wants to get $220,000 for the home, so the best way for you to get the seller to pay the closing cost is to make an offer as near your max as you can with the stipulation that the seller pay the closing costs. This way the seller gets the wanted $220,000 without losing any money on their part and you get paid closing costs.
However, this all hinges on one thing…. the appraisal. If the appraisal only comes in at $220,000 you will have to renegotiate and possibly lose the home.