Profile picture for UPer

Can you have a 3% seller contribution to closing costs when you are purchasing a forclosure?

Can you have a 3% seller contribution to closing costs when you are purchasing a foreclosure with an FHA loan?
  • December 17 2010 - US
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Answers (8)

Profile picture for dmills8
Try to keep this out of a Short Sale Transaction:

The answer to this question is different when doing a Short Sale. If you do this in a SHort Sale where the Sellers are under-water then you put that deal in a vulnerable situation.

The lien holder or holders are the ones that would have to come up with that 3%, not the up-side-down Seller. If the lien holder(s) wants to play hard-ball they will ask on their Approval demand that the Seller will need to make a "cash contribution to close" the deal, to cover those kinds of items and your deal will now be vulnerable to not closing. Why? Because 80% of those Sellers don't have $10,000. 

  • December 18 2010
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Absolutely. ANY seller can pay a buyers closing cost---usually up to 3%. While most sellers don't advertise that they will pay buyers closing cost, most will. There is a specific method to ask for seller contributions that gets acceptance almost every time.
  • December 18 2010
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Absolutely " Yes", is matter of ask for it, of course your agent will tell you "do not ask for it" if you want your offer to be accepted. but 95% of my buyers get their closing cost pay, well part of their closing cost. (3% average). There is a few bank's offering this as an incentive (check HOMEPATH ) and click special offers. They offer you 3.5 % closing cost on your purchase.
  • December 18 2010
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You can always ask.  I have seen many instances where the banks give credits to the buyers even though it is a foreclosure.  Fannie mae foreclosures is wrapping up a special where they gave 3.5% to owner occupied purchases to help with closing costs.  In Northern California I see people get the credit more times then not.  If you are in a multiple bid situation you may want to rethink but if you are not the worse thing they can say is no.  Also if you cannot afford the closing costs you need to ask for the credit:)
  • December 18 2010
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Profile picture for Patrick Beringer

Sometimes yes, sometimes no--It depends on what's going on with a specific property.  Your agent should be able to help you come up with your best strategy on a specific property.

  • December 18 2010
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Profile picture for wetdawgs
You can ask, but it isn't likely you'll get it, and it may drop your bid to the bottom of the pile.    Cash buyers rule in purchasing foreclosures.
  • December 17 2010
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Yes, you can ask for 3% closing costs on any offer you make. 3% seller concessions is the maximum FHA will allow right now. It is up to the selling bank to accept this or not. If you are asking for 3% seller concessions and another buyer is offering the same price without seller concessions then you could be outbid. Here in my area, most of my offers request 3% seller concessions.
  • December 17 2010
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Probably not.  If the seller is in foreclosure, they have not been making payments and may not have enough equity to pay toward  your closing costs.  Your Buyer Broker can do an estimate of seller closing costs, but will need to know what the seller owes the lender (or lenders), including late fees, attorney fees, etc. to be accurate.  It will be more difficult if it is a short sale where the house is worth less than the debt.  If it is a bank owned home, you can always ask.  Presumably, the bank has money :-)

Is this helpful?

Muriel Lawty
Cooper Jacobs Real Estate
Seattle, WA
  • December 17 2010
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