Closing on Your Dream Home: Tips for Securing a Seller Credit

Closing on Your Dream Home: Tips for Securing a Seller Credit

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In a real estate transaction, it is usually the buyer who pays for the full closing costs. 

Closing costs includes all costs associated in closing the purchase of the home, including attorney fees, appraisal fees, title company fees, etc., and is usually around 5% of the purchase price. (This is on top of your down payment)

Your lender should be able to give you an estimate on the closing cost, and if you are short on cash on hand to bear all of it,  then you might want to consider negotiating with the seller to bear some of the closing costs. 

As part of the negotiation, you may ask the seller to pay for some of your closing costs, based on the cap guidelines per below: 

  • If you are applying for FHA loan, your minimum down payment is 3.5% of the purchase price of the home. 
    • In this case, you are able to negotiate with your seller to provide you a closing credit up to 6% of the purchase price 
  • If you are applying for Conventional loan and your down payment is less than 10% of the purchase price of the home
    • In this case, you are able to negotiate with your seller to provide you a closing credit up to 3% of the purchase price 
  • If you are applying for Conventional loan and your down payment is more than 10% of the purchase price of the home
    • In this case, you are able to negotiate with your seller to provide you a closing credit up to 6% of the purchase price 

Whether if the seller will agree to provide you some closing credit, may depend on your offer price of the home, or conditions and contingencies.

So what’s the best way to explore this option?  To contact me, so I can support you negotiate in your best interest! 

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