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Answers (7)
- Bruce Lang, "brucelang"
- Contributions:202
it may have no impact depending on how it is structured....often, commission can be paid on the net price and not gross price...also, the 2% transfer tax can be paif by buyer if you choose to negotiate it....this is often a critical deal to getting people who have good income but low cash...its a win win for everyone if the net price works.
- Mary Beth Hurtado, "MaryBethHurtado"
- Contributions:314
While we agree in general and have helped many of our buyers afford to buy a home they want using a sellers assist, there is one problem that may occur. We have found in selling main line real estate that you must take into consideration what will happen if the home does not appraise for the price that was elevated to make room for the assist. Make sure to discuss this with your Philadelphia listing agent before you agree.
- MICHAEL ESPOSITO, "MIKE ESPOS JR"
- Contributions:27
The only difference to you...is any percentages like commision and transfer tax, both of which can be avoided. Most Realtors will agree to commission on the base and the buyer alot of time will compensate for the transfer tax. Not a big deal! Almost all buyers need assistance these days. So if you are not willing to do sellers assist you are shooting yourself in the foot.
- Call The Sisters, "Call The Sisters"
- Contributions:373
The seller assist has no adverse affect on the seller. I practice in Pa and we do this all the time.
If you price your home at $225,000.00 and accept an offer for $215,000.00 you are selling your home for $215,000.00. If the offer includes a 3% seller assist you are agreeing to take $215,000.00 for your home but permitting the buyer to finance 3% more. The buyer gets a mortgage for approx $221,000.00 and applies $6,000.00 towards closing costs. you still get $215,000.00.
The name seller assist is confusing. In essence the seller is assisting the buyer to borrow more than they are paying for the home. The seller is not contributing to the closing costs out of their proceeds. However it appears that way on the HUD.
The home must appraise at $221,000.00 for this to work. The buyer pays the transfer tax on $221,000.00. The seller pays the commission $215,000.00.
If you price your home at $225,000.00 and accept an offer for $215,000.00 you are selling your home for $215,000.00. If the offer includes a 3% seller assist you are agreeing to take $215,000.00 for your home but permitting the buyer to finance 3% more. The buyer gets a mortgage for approx $221,000.00 and applies $6,000.00 towards closing costs. you still get $215,000.00.
The name seller assist is confusing. In essence the seller is assisting the buyer to borrow more than they are paying for the home. The seller is not contributing to the closing costs out of their proceeds. However it appears that way on the HUD.
The home must appraise at $221,000.00 for this to work. The buyer pays the transfer tax on $221,000.00. The seller pays the commission $215,000.00.
- Gary Mast, "Dublinguy"
- Contributions:11
The offering of a Seller assist in many cases is viewed as a trade-off with lowering the sale price. While this may be true, in my experience I have seen the assist have a more dramatic impact. After location and house size most Buyers will shop in their mortgage approved or price comfort zone. Based on the Buyers cash resources some homes may not fit that zone. Whether it is due to need of repairs/ upgrades, or just not a willingness to empty their pockets to make the purchase, the seller assist may help them over the tipping point. This can be of value to the right Buyer. The Seller needs to understand this concept before pricing their home. Most seller Assist's are limited to 4% of the purchase price. Always insist as the Seller that the commission paid is on the net sale price. Gary Mast RE/MAX Action Realty
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- Joe Sheehan, "Joe Sheehan"
- Contributions:13
I would think that a seller would be interested in the bottom line. That is, what's the difference between a 3% reduction in price vs. a 3% seller assist? Essentially, nothing. To a buyer who is short on cash, that could make a huge difference. Some buyers would rather bring less money to the settlement table but have a larger mortgage and a larger monthly payment. As a seller, you should consider all the terms of an offer from a buyer. I would probably weigh a seller assist vs. an equal reduction price as about even. Hope that helps. Best of luck in your real estate transaction. Joe Sheehan Keller Williams Real Estate
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- Sharon Lewis, "Sharon Lewis"
- Contributions:3917
I would think that you would want to call a local attorney or realtor for the clearest answer on that one.
In Pennsylvania, what are the disadvantages for a seller of providing a 'sellers assist'?
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