selling a house

[dinoa2]

looking for some advice or opinion from real estate tycoons out there or even a real estate agent if we have one in the group

am trying to sell a house and am listed with an agent
get an offer today and in the contract they want me to pay 5,000 toward their closing/purchase costs
instead of saying their offer is x, they say x minus $5000 which is money I pay toward the costs.
my agent says this is a usual practicee but I have never heard of it

so what say you real estate experts out there

[zeavran1]

I'm not a real estate agent but I did buy my house 12 years ago and we did what was called a sellers concession. Don't remember the details but it seemed to be a usual practice at the time. Not sure nowadays.

[themoneycollector]

It sounds pretty normal.

Most buyers will try and play hardball now and request some type of concession.

You could either get your X amount and have to pay $5k at closing. It's pretty normal and besides, depending on your state, th buyer could be responsible for title insurance which is one of the most expensive items at closing.

[tmanqz]

Sounds a bit steep for closing cost to me. In some situations you may consider doing half the closing cost, this all depends on the market, buyer or seller market...... Also depends on how fast you want to sell the house...........
You factor in all these things when selling your house and trust your agent, be careful with the agent, make sure yours is on your side and fights for the best deal possible for you, not just out for a quick buck.

[althekillr]

its a normal practice.

the thing i always look for is do they really need the money or not. sometimes they are just trying to leverage as much as they can.

nowadays there are lots of appraisal issues with the new HVCC law that passed where long story short, unqualified appraisers are doing the appriasals in areas they do not know, so they are just taking the lowest comparable sales and screwing up transactions.

One counter that I usually include in my contracts is "if property does not appriase then the credit dissapears". so in the example of a 200k house and it only appraises for 175k, that means you have to drop the price to 175k(if you choose to do so or you can cancel) and then you don't have to give them a 5k credit. but if they don't have any funds in the bank then this is probably moot, cause they need it to close.

also if it says 5k for closing costs they have to use it all up, otherwise you get to keep the diff. they don't get the rest. but its usually easy to use that up.

not sure how real estate differs, I'm in california.

[nativetexan_1]

The REQUEST for a concession sounds normal. A "NO" is also normal. At that point, they have two options, say "Ok" and pay their own closing costs (adding the amount to the loan if the lender is agreeable), or taking a hike. How badly do you want to get rid of the property? Tough call.

[Stench]

I've seen these, but have never done this either. Good luck either way!

[Robudda723]

Sold my house last year. I paid closing costs, but instead of asking price minus the closing. I added the closing then paid. It allows them to not come up with the extra cash and you get your asking price. Example: instead of 250,000 asking minus 5,000, you do 255,000 then pay closing.

Rob

[dinoa2]

keep the comments coming guys, I appreciate all your thoughts

[fiddlegrin]

Hiya Jerry,
There are some good insights here.

It is not unusual for people to ask...

Our response will depend on whether or not it's a "Buyer's Market" and our motivation to sell.

"They can ask for anything....... doesn't mean they will get it"

.

[weezel32]

I just talked to my loan officer today about a house and she told me to make sure to at least negotiate closing cost when I offer.

[jledou]

When we bought our house about five years ago we asked for them to pay closing cost (on the advice of our agent) and they did. We did not specify to price but just said that they would pay actual closing cost.

[brianv]

This is something that people who may be having trouble coming up with some extra cash can use as leverage to the bank to secure a mortgage. It is a very regular practice and I have utelized this in two recent real estate purchases to save some extra loot for repairs (and some extra smokes!).

From a buyers standpoint they also get to claim thoses costs on their tax returns at the end of the year even though it was really you who paid the costs. Robudda's advise above is spot on and would be my recommendation to get the full asking price.

Best of Luck!

[jakespeed]

We recently bought a house, and asked the sellers to pay closing costs, which they did. Also, our offer was 2k less than the 298k asking price. The house was held in trust by three children of an elderly lady, so with the proceeds being split three ways, I don't think that any of them was really taking a hit. It worked for us, because all our cash went to the down payment.

[dinoa2]

update on progress--- one offer went south when we couldnt come close to what we wanted to clear

have a second offer which started with a decent offer, we counter offered dropping about $5,000 and they countered that almost splitting the difference

we are about $2,000 from what we would really want
our agent says this is good price and they could run if we counter asking for the 2,000
not exactly a sellers market in our area, and dont want it to set for there for much longer
wife says "its your decision" so do I wimp out and take the offer or play hard ball and see if they go up 2,000 or run away