Seller paying closing costs?

2 Replies

Hello all,

REI newbie here. I have been looking at a triplex to owner occupy for around $180k. I've ran the numbers and it looks like a potentially good investment, the only thing holding me back from pulling the trigger is that the down payment plus closing costs would eat most of my cash reserves and I wouldn't feel comfortable jumping into an investment without reserves. While shopping for loans, however, I was told by a couple of lenders that it is possible to get the seller to pay closing costs if the full asking price is offered, which would ease up my worry of being left without reserves.

My question to the BP community is: Is this a valid statement? And if so, what are the chances of the seller accepting these terms? I understand sellers try to get as much money out of a deal as possible so I had not considered asking a seller to pay closing costs. Also, is this something that would get amended into the contract if they do accept?

This would be my first deal and as you can see, I am a bit apprehensive, but the thought of being stuck in analysis paralysis is an even scarier one. I want to take the plunge soon.

Any advice is appreciated! 

It is actually quite common to ask the seller to pay the closing costs in exchange for a higher sale price.  Could be asking price, could even be above asking price.

Effectively what you would be doing is rolling the closing costs into the mortgage.

Obviously, this approach requires that the property appraise out at the higher price.

You don't always have to pay asking price or higher than asking, it depends on your market. A good buyers agent will be able to help you determine what's typical in your market, and also help you negotiate closing costs along with the offer. I've made offers on properties that were less than asking AND had the closing costs paid, and the seller took it.