Asking for Closing Costs vs. Higher Price (Same netback)

[Steve A]

What are the factors to consider when deciding whether to ask the seller to pay for closing costs or just boosting the offering price to compensate.

Sample deal:

Offer 1- $515K, each party pays his own closing costs.

Offer 1a- $500K, seller pays first 3% of buyer’s closing costs.

On the face, both offers net the seller $500K (less commission, etc.).

Which offer is better for the buyer? The seller? Why?

[Scott R.]

Depends on the property I guess, location and such, possibly apprasial. Offer 1a would allow the bank to view the property $15k cheaper, comps should be easier, depends if this property is close to FMV or not. Although setting price at 515k would help increase the per sq ft of the property and in the future sellers would have a higher comp to compare with. I'd say the 515 would look better to the seller, even though the net would be the same, with the little realtor experience I have I'd rather show my clients(sellers) a 515k offer.
Seller also pays realtor comission based on sales price, that would be almost another $1,000 paid out for the higher price, so seller would probablly net less money, but I'd say give most sellers the average they'd take the higher price. Guess it could also effect like private mortgage insurance, might cause some buyers might now need it because of that $15k.
-Scott
ps- I think you ment to put the 515k offer seller pays 3%. According to your post I'd take deal 1a cheaper price and seller pays some closing cost!