This week, I'm going to cover a topic that comes up a LOT in conversation with clients!
The question relates to closing costs -- and, how seller paid closing costs work. It's actually really nifty (yea, I found a way to use the word "nifty" in a business email!) to roll closing costs into your loan.
In this week's Tip of the Week, I'm going to explain how all of this seller paid closing cost stuff works!
P.S. If you have questions about structuring a real estate deal, let me know! I love to help on this sort of thing!... Number-crunching is totally my thing!
RJ Baxter
Branch Manager
303-670-0137 – Direct/Text
720-398-3314 – Fax
165 S. Union Blvd #400
Lakewood, CO 80228
TRANSCRIPT:
What are seller paid closing costs? If you're wondering what the answer to that question is and how you can get your closing costs paid when you buy a home, I'm going to answer that question for you today. My name is RJ Baxter with Fairway Independent Mortgage with your tip of the week. So let's dive into it. So first of all, seller paid closing costs are simply when the seller of the home that you're buying pays your closing costs. Because when you obtain a home loan, you're going to have closing costs in the loan. And typically you'd have to pay for those closing costs out of pocket, so that'd be something you'd have to bring to closing in order to buy the house. So one of the ways to get those covered is to have the seller pay those closing costs. You might be asking yourself, well how do I do that?
That sounds like a great idea. The answer is, your real estate agent has to submit your offer in that manner to ask the seller to pay your closing costs. So when they submit the offer, that's part of the offer to put it in there that they're going to pay X number of dollars towards your closing costs. And if they agree to that offer, then they're going to pay your closing costs. Now in today's market, it's still a pretty hot real estate market in a lot of areas. So you're competing with other buyers. So you might be thinking, how can I get my offer accepted if I'm asking the seller to pay for my closing costs? And the answer is, well, I won't say the answer is, but the market is a little bit less crazy right now. So there's not quite as many offers, especially in the Denver, Colorado area.
We're not seeing 20, 30, 40 offers on a house. There might be two or three, or maybe you're the only offer. So it's not uncommon to have seller paid closing costs on transactions. Now you may have to raise your offer a little bit when you submit your offer with seller pay closing costs because the seller is going to net less on the home. So let's say for example, you're offering on a house that's $400,000. And you're going to, let's say you're going to offer the seller full price, but they're going to pay $4,000, you're going to ask them to pay $4,000 worth of closing costs.
Well, the seller, they're only going to net 396. So in this example, you may have to offer 404 or 405 with them paying $4,000 in closing costs in order for them to net what they're looking for, if you want to go in at an actual full price offer. So that's just a little bit more about how to get your closing costs paid by the seller. Now, if you have questions about that, or if you have questions about how to get preapproved or how this whole process works, that's why I'm here. I love answering questions about buying a home or financing a home. So just give me a call. My name's RJ Baxter, Fairway Independent Mortgage. You guys have a great day. Thanks for watching.
