Closing Costs Question

2 Replies

This may be a naive question but I'm going to ask it because I don't know the answer. Can I reduce closing costs as a buyer if I use seller financing in lieu of conventional financing? Can I offer a bit more on the property if we use seller financing?

I'm looking at a property and the seller is willing to sell for $X. If my closing costs would be reduced if the seller agrees to carry a note in lieu of a traditional mortgage, can I offer a bit extra on the purchase price? It would be a win/win as my total costs could be reduced while more money goes to the seller (instead of a bank).

Any insights on this, please let me know. Thank you!

@Nicholas Leone Absolutely. 

Closing costs when using bank financing typically include origination fees, appraisal fees, doc prep fees, etc. You can avoid all of those if the seller is willing to carry the note.

I would, however, recommend getting an independent appraisal. There's nothing stopping you from overpaying if you don't get a traditional bank loan and an appraisal can give you a pretty good idea if that's something you're about to do.

NCRR can be reduced, In some cases, sellers just want to hand you the property so they can get with their life. Anything is negotiable. As part of the concession I will ask them to buy your a home warranty among other things.