Sellers Pay Buyers Closing Costs

Why should the seller pay a buyer's closing costs?  Sellers who already feel they have sacrificed enough equity due to current market conditions, are sometimes indignant that the buyer would also ask for help getting their loan.

The fact is that these days, the most popular loans are either USDA or VA with 100% financing or FHA requiring only a 3.5% down payment.  Many of these buyers simply do not have the additional funds necessary to pay the loan costs.

I suppose one could argue that Grandpa never paid anyone's closing costs and he had to put 20% down.  Perhaps one could also argue that the buyers of today need to have more skin in the game if we are ever going to have a robust housing economy again.  One may be correct in his opinion , but the current reality is that there may still be a "for sale"  sign on the front lawn a few months from now if you refuse to work with the buyer.

Something else to consider is that when  a seller agrees to pay the buyer's closing costs,  they are probably helping to turn a buyer who "wants" to buy a home into a buyer who is then "able" to buy a home.  Buyer closing costs are just one more item on a seller net sheet.  My advice is to examine the buyer's entire offer.  If the number at the bottom is attractive, ask your agent to mark your listing sold!

Nancy Puder is the broker and owner of SignatureProperties, a prestigious real estate sales and management firm in Arroyo Grande, CA.  You may contact her at Nancy@NancyPuder.com or (805)710-2415