Closing costs Confusion - off market deal

[Andrew Assman]

I am currently working on negotiating an off market deal purchasing a SFH from a colleague in Minneapolis. In order to discount the price we are working without a buyers agent and just have a facilitator to do the paperwork. Here’s the current deal terms proposed from sellers: $225,000 purchase price Sellers cover closing costs estimated at $7,300 Sellers cover facilitator fee of 2% purchase price Is $7,300 in closing costs realistic for a $225,000 purchase price in Minneapolis AND does that include both buyers and sellers closing costs? A little confused about what closing costs the sellers would incur and wanted to make sure I have my info right before going back to sellers. Would that $7,300 cover buyers closing costs, too? Any help from any experienced realtors would help! Thanks, Andy

[Christopher Phillips]

@Andrew Assman

It's a false assumption that not having agents involved somehow gets you a discount.

Your closing costs as a buyer has nothing to do with agents. Buyer closing costs are usually around 2% in Minneapolis. 4% on the high side...

The seller generally pays the agents. So, your closing costs would be the same either way. Mostly, inspection, appraisal, underwriting fees, escrows (6 months property taxes, 12 months home insurance), property survey, title search, lawyer fees, lender title insurance. If you're paying all cash, you would avoid the underwriting fee and not have to setup escrow for the property taxes and home insurance.

Seller's costs would be commissions (which would be a facilitator in this case), state deed tax, loan closeout fees, legal fees.

As a buyer, what the seller has to pay isn't relevant. Only thing you should worry about is what you think the house is worth. The seller has to worry about what they will net, not the buyer.