Seller Concessions
Closing Costs
This is the payment made at the end when you sign paperwork and finalize the purchase. This can consist of taxes, loan origination fees, discount points, appraisal fees, title searches, title insurance, deed recording fees, and other miscellaneous fees that can come up depending on the transaction. This cost can be anywhere from 2% and 6% of the loan amount for the home
How Can I Avoid Paying This ?
In the Las Vegas area, we are currently in a buyer’s market due to the higher interest rates, normal growing prices, and a higher inventory. This leaves the buyers with negotiating power they can use to help them with purchasing a home. One of these tactics is asking the seller’s for credit towards the closing costs! Which is useful to help the buyers keep more money in their pockets
How Much Credit Can I Ask For ?
When it comes to this strategy, it does have limitations, but do not worry, because they are reasonable. For those using a conventional loan and put down less than 10%, the seller can contribute up to 3%. If your down payment is 1-%-25% the sller can contribute up the 6%. For those getting an FHA loan, sellers can contribute up to 6%, and they can contribute up to 4% for those getting a VA loan
What Happens To Any Left Over Credit ?
Unfortunately, the money can not exceed past the closing costs and will just go right back to the seller in these instances. The seller’s credit can’t be used for down payment, mortgage insurance, or any other cost related to the home. However, this still is a powerful tool we can use in this market that wasn’t an option in the seller’s market we left
Final Thoughts
A lot of people think that asking for a lower purchase price is the only way to go. Realistically, it will only lower your monthly payments by a couple of hundred dollars. Whereas this way, you can ask for much more, and can save that extra cash for moving costs, future furniture purchases, and much more. Give me a call or shoot me a message so we can talk about a strategy on finding your next home !
