When you are selling a house, there are many facets to an offer. Today we’re going to discuss closing costs. Some buyers will ask you to pay their closings costs as part of their offer on your house. Sometimes you’ll come to an agreement on the price and then the buyer will ask if they can increase the purchase price by a specific dollar amount with your paying that same amount towards their closing costs. The reason why the buyer is asking you to do this is so that they can finance in their closing costs. Many times it’s the buyers’ bank that originally suggests this.
When you’re looking at an offer that includes your paying closing costs, remember to subtract the amount of the closing costs so that you’re looking at the actual “net” offer to you. When my client has been asked to pay closing costs, I subtract the closing costs before the commission is determined (since you won’t actually receive that money, I don’t want to charge you commission on it!)
The closing costs will be spelled out in the offer, in the Purchase and Sale Agreement and will be on the HUD Settlement Statement so everyone (including your account) knows that you paid this expense.
Photo Credit: Images_of_Money