Profile picture for mamtazchowdhury

Who will pay Closing Cost? Byer? Seller? Lender?

  • March 16 2013 - Berkeley
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Answers (4)

Profile picture for mamtazchowdhury
Buyer has very difficult time to pay Down Payment & then again Closing Cost. This rule has to Change..
  • March 17 2013
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There are typically regional standard expectations that the buyer and seller have certain closing costs each is expecting to pay and that defines the starting point for negotiation.

As mentioned, the lender may assist in paying for the costs and the benefit is it helps to define the amount of cash out of your pocket, versus the rate you pay.
 
Who pays between the buyer and sell after regional standard, while negotiable, will also depend on the interest level of buyers in the home you're pursuing.

If you ask the seller to pay, not only may it increase your price to make up for the costs (as mentioned) because the seller is looking at their net, but also, if you're up against other offers there are two major draw backs to asking for the seller to pay for closing costs:

1. You will have a tough time getting it to appraise because you have to add dollars to the "actual" value.

2. Your offer will look weaker in the eyes of the seller, so it decreases your chance of acceptance.

  • March 17 2013
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Closing costs are negotiable.  While it is true that the buyers will pay in either higher rate or price, how the buyer will cover those costs makes a difference.  For example, if a buyer has limited cash on hand, asking the seller to pay for closing costs will reduce the necessary funds to close. 
  • March 17 2013
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Profile picture for Go Huskers
The buyer, 100% of the time regardless how it's spun. If the lender pays, you still pay with a higher interest rate. If the seller pays, you still pay with a higher purchase price. The buyer always pays as it should be. The buyer is the one buying.
  • March 17 2013
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