Do I need closing cost assistance? This answer is going to vary from person to person. Some people don’t “need” closing costs help, but it would be nice to have. Others would not be able to purchase a home without some aid. (Be sure you understand what closing costs are first!)
For the TL;DR people, closing costs are your pre-paid taxes, insurances, title fees, and lender fees.
What is closing cost assistance:
First things first – let’s discuss what closing cost assistance is.
You are asking the seller to contribute part of their house sale to help you pay your fees. For example: If we are looking at a house that is 200k and you make an offer of 195k and ask for 5k in closing costs assistance, the seller is now netting 190k. This money isn’t “free” and it has to come from somewhere.
How much assistance can I ask for?
We can ask for any amount of closing cost assistance that your lender determines you need (there is a limit to how much we can ask for as well).
However, not all sellers are open to paying closing costs for the buyer. Keep in mind this is not a given and the seller does not have to provide it for you.
Are specific price ranges more likely to ask for closing cost assistance?
We find that the price ranges are 200k or less, almost ask for closing cost assistance. The next most popular price range is $200-300k. Once you pass that amount, it’s less likely to have people ask for it. (Not always though!)
Why would the seller not agree to help with closing costs?
There are a couple of reasons.
- Many sellers don’t want to agree to it because they never asked for it.
- If you’re trying to low ball a seller while asking for closing costs, they find it rude or insulating.
- They don’t feel they have to!
How can I get a seller to agree to help with closing cost assistance?
We always say fit you’re going to ask for the assistance; then, you need to make a full price offer. You may even have to go over the listing price to get the closing cost assistance. That is not uncommon and shouldn’t freak you out.
Yes, this means if the house is 200k, you might have to offer 205k while asking for the additional 5k in closing cost help.
If you don’t need the closing cost help, then we have a much better chance of getting our offer accepted. (and getting it at a lower price!)
Sellers seem more willing to go lower in price than giving the closing cost help. Even if the numbers even out in the end – that doesn’t keep them from being weird about it.
The seller does not have to help with closing costs and they tend to get worried that you don’t have enough money to purchase the home they are selling.
Are there programs to help with closing cost assistance so I don’t have to ask the seller?
Sure are! Talk with your amazing, local lender to find out about these programs and if you qualify.
Lastly, keep this in mind, the seller is one paying for your closing costs when you ask for the assistance!
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