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      SHOULD YOU PAY FOR BUYER'S CLOSING COSTS? MAYBE!

      It’s not uncommon for buyers to ask for sellers to pay for some of the closing costs. This is especially the case with first time buyers in Montpelier/Barre who may not have as much cash built up. Asking the seller to pay for some of the buyer’s closing costs can make a huge difference to a buyer. As an example, a buyer with $15,000 saved toward buying a house may need to dedicate that money toward the down payment.

      Asking the seller to contribute, say $3000 toward buyer’s closing costs may go a LONG way in making the sale happen.

      It really just means that the buyers are going to finance some of the closing costs. Here’s an example:

      $200,000 purchase price, with $3000 seller contribution to closing costs (Realtor vocabulary term!). That means it’s really a net sale of $197,000. If the buyers are putting 5% down, they’ll have to put 5% of $200,000, and not 5% of $197,000. The property will also have to appraise for at least $200,000.

      Essentially, the buyers roll some of their closing costs into the loan.

      So that’s how it helps the buyers.

      But how does it help sellers?

      Well, put bluntly, it can let a sale go forward. If we’ve found a ready, willing, and able buyer, and the only sticking point is that the buyer is a couple thousand dollars short, let’s structure a deal to make it work!

      At the closing, sellers are going to get a check. If the sale is $197,000, or if the sale is $200,000 with $3000 contribution, it’s the same thing. The thing to remember as a seller is that the real sale price isn’t $200,000…it’s $197,000.

      My advice is to not get hung up on what your coworker or uncle says about “Why should you have to pay for their closing costs?!” That’s not really the point. The point is that if the buyers borrow a little more, and you get the same amount of money, and it lets the sale happen, then it makes sense to structure the deal that way.

      I can walk you through specific examples and answer any other questions you might have. Just send

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