Itʼs not Tag, Title and Tax

 

Mr. and Mrs. Buyer, this is for you.

Buyers have closing costs to pay at closing and sellers have closing costs to pay at closing.  Buyers often ask if they can roll their closing costs into their loan. Unlike purchasing a car, the closing costs cannot be simply rolled into the mortgage loan. Someone has to pay them.

Now, the seller has to pay their closing costs and seldom, almost never does the seller ask the buyer to pay their closing costs.  Buyers ask the sellers to pay their closing costs all the time.  So, hypothetically, let’s say you are buying a house that is listed at $105,000 and you know that the average list price to sale price ratio is 97% and you want to make an offer.  Letʼs say the sellers were correctly advised and listed their property at $105,000 knowing the list price to sale price ratio is 97% and understanding that fair market value for the property is $101,000 – $102,000. The house is just what you need and $101,000 – $102,000 is a fair price and you need the sellers to pay your closing costs of $5,000 because you only have enough money for the down payment, will you offer $100,000 and ask them to pay for your closing costs out of that?  What is a “fair exchange of value”?  What if it is your house and you are selling? Do you feel you should get market value? A fair exchange of value. Fair! Yes, I said fair! Will you offer $107,000 and ask them to pay your closing costs? What is wrong with paying what itʼs worth? What is wrong about treating people fairly even in a real estate transaction?  You know, treating others how you want to be treated.  The monthly difference on a payment on a sale price of $102,000 vs $107,000 for 30 years at 5% interest is about $26. – less than $1 a day.

Be kind.  It will make you feel good.

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Published in: on March 2, 2011 at 3:12 am  Leave a Comment  
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