Im making an offer on my second sfr today. There is some competition, they have already received at least one offer so I have decided I can sweeten the deal alittle if I offer a little over asking and have the owner pay my closing costs. This will decrease my cashflow but increase my cash on cash return. Have you ever done this? Does it work?
Yep, its a great idea. Plus the seller's agent has to tell other buyers "We have multiple offers" and if they say, "oh really, full price?" they get to say "over asking price" which scares people away :)
If you are paying cash then you don't have to worry about it no appraising either.
@Tom R. Smart thinking!
Well according to my lender since it is my second mortgage I cant have the seller pay more than 2% of the closing cost. This makes no sense to me but there was another problem with the deal that made it unworkable so I backed out. There is a solar panel system on a lease and the lease is terrible. If I took over the lease I would basically be paying full price for electricity and after the terms of the lease I would still have to buy the solar system which by that time would be 20 years old and pretty much worthless.
Did this on a condo purchase, the association had a move in fee, seller had to pay. Title fees were higher than normal, seller had to pay. Structuring your offer that way keeps you safe from some potential vultures, the down side is some sellers will reject on principal.