Minneapolis, Minneaota · Member since 2018 · 14 posts · 7 votes
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
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.
Gulfport, MS · Member since 2017 · 48 posts · 17 votes
8y
@Andrew Assman, seems high. Not sure what that is for! Google Bankrate for info and see if you are on the right track. Maybe the facilitator is charging additional fees? Good luck!
Rental Property Investor · Aurora, CO · Member since 2018 · 288 posts · 117 votes
8y
Would greatly depend if it’s a cash purchase or if you have your own purchasing closing closets on a loan. That can be another 1.5% for. Loan closing cost. Also, are you doing an appraisal and inspections? That is something that is sometimes wrapped up in there but often waived for cash purchases.
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.
Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
8y
$7,300 should cover your portion unless you have high taxes and insurance. Figure most buyers request ~3% to cover their closing costs, they are offering you 3.2% (7,300/225,000).
The facilitator fee should be paid out of his proceeds so it doesn't concern you. If this is not listed on the MLS you could likely get an attorney or closing company do do this for cheaper than $4,500.... Just have to tell them your purchase price, seller's contribution to buyer's closing costs and have them get going on the title work. The $4,500 to a realtor is essentially paying them for writing up a purchase agreement for you two.