Closing Costs - Can the Seller Pay?

Many buyers, particularly First-time Buyers, are short the cash they need for the Down Payment and Closing Costs.  A common question is "Can We ask the Seller to pay Closing Costs?"  The simple answer is Yes, you can ask, but there are limitations on how much the Seller can Contribute to Closing Costs.

Conventional Loans In a conventional loan, the seller can only pay nonrecurring costs. The seller's contribution is limited to a percentage of the amount the buyer is putting down and will vary from Lender to Lender.  It is very important that you talk to a Lender prior to making an offer to Purchase a Property to be sure you understand what you can and cannot ask for.  VA Loans VA loans are Government Backed Loans and the the seller may pay some or all of the Closing Costs.  You will want to check with the Lender because these terms and conditions are in a constant state of change in today's market.   FHA Loans FHA loan are currently the most popular finance vehicle in the market place.  The Seller may contribute to Closing Costs on these Loans but there have been recent changes in how much that can be and down-payment requirements have changed too.  It is very important that you verify with your Lender the amount you will need to put down and the amount the Seller may contribute.

 Seller's Point of View!

A Seller's willingness to contribute to closing costs is often driven by the offer on the Property.  Sellers may be willing to contribute to your Closing Costs providing you have made a fair offer on the Property and they have enough equity in the property to do so without incurring a loss. 

As your Real Estate Agent, my job is to review any recommendations your Lender has made and help you draft your offer accordingly.  

Call your Lender today and verify what you can and cannot ask for, and then get busy and Find Your Dream.  It's a great time to Buy, you just need to make sure you have your facts in order before you start your Search.  I am here to Help, just give me a call.

Sandra Paulow, Associate Broker, GRI

Your High Country REALTOR®

(928) 242-0300