I don’t really think it’s fair for buyers to be able to keep the excess to use to pay HOA dues, etc., especially if it is $1000 or more. I guess “fair” doesn’t really enter into the equation when you are a seller in a buyer’s market.

Luckily we’re not that hard up to sell…just yet, anyway.

Thanks for your responses!

I believe the default of the contact is ” up to”, so yes technically you the seller gets any unused portion. But that never happens. they find a way to fill the void. They buy down points, they use the home inspection receipt, prepay the, loan, prepay hoa fees for two years, etc.

You might be able to counter 2.5. Or have your agent call the lender to find out what they really need. Sometimes the, lender will tell you.

Frank via cell (sorry for typos)

Some buyers don’t have enough money and “need” the CC or they can’t do the deal. This is fine, but then you counter the sales price… all the way up to list if need be. One major problem with closing cost help is it confuses the appraisal process. The appraisal is not based on NET but on the contract page 1 price. You can get creative and put in the contract that if it does not appraise, the contract will self adjust (ie same net) and reduce the CC as necessary.

Also when you put in your offer, there is no problem with making the offer include all closing costs. It all depends on the home. If it is $200,000 and has been on the market for a long time, and YOU decide you want to offer $175,000 (do not use that number, I am just throwing random stuff out) then you can write up the contract as $185k with $10k in closing costs. (ie $175k net). Now they might counter and cut down the closing costs. Like they might counter at $197,000 with $5k in closing costs. In that case, their NET counter is $192k. If you are ok with that net, then you can counter $202k with $10k in closing costs (same net price).

Note that if you put TOO HIGH of closing costs in the contract, and they exceed the actual closing costs, you may/will lose that money. So don’t go nuts. And some lenders will be “conservative” and tell you a higher number up front and think they are doing you a favor, but then when you close and their fees are LOWER, you lose that extra money. I usually stick to like $2k UNDER what I expect the total closing costs to be.

Also your agent can show you the last 5 homes and what seller subsidies they have done. Different price points and areas have different local norms.

One fear for the seller is if you INCREASE the price to include closing costs, then it might not appraise, and both parties have to start the negotiations over again.

Also as for the lender, talk to 2 or 3. Ask friends on facebook for suggestions. Don’t get stuck with a ton of points and fees. A ton is relative, but talking to 2 or 3 lenders you trust will get you started in the right direction. Do no use Lending Tree or a random internet place.

Good luck.