Ask for seller to pay closing costs?

Question

I am ready to make an offer on a house being listed for $129,500.  I am looking at two different options to structure my offer (see below)... Is there a tax (or other) advantage to either offer?

Option A:

Offer $125,000 and ask seller to pay closing costs estimated at $3,500.

Option B:

Offer $121,500 and pay my own closing costs estimated at $3,500.

Russell Brazil · Answer

I always prefer to pay more and wrap some closing costs into it.

Julie N. · Answer

@Heather Schmidtknecht Will this be a primary residence or investment? Check with your mortgage broker about how much in closing cost you can ask for since they vary based on the intent of the purchase.

Renata Brajkovski · Answer

Heather, you will make your offer stronger by talking to the agent that represents the seller and asking them what it important to the seller?

Sometimes it is the closing date, sometimes it is the price. Make sure you communicate and find out that is that the seller needs and try to include that in your offer.

Palak Shah · Answer

@Heather Schmidtknecht I’d have the sellers pay the closing costs because the more cash I have, the more deals I can do!

Renata Brajkovski · Answer

@Heather then give them the desired closing date and offer more (first option - $125k) but ask them to pay the CC

In that way 'subcounsciously' they have gotten a price which is close to what they are asking for, and their desired closing date but you are asking for a small thing in return. (for them to pay the Closing costs)

Theresa Harris · Answer

Assuming you are borrowing the money, under option A, you will have to borrow more money.  But as you said they want $125K, so that is probably the better option to get the deal done.

Palak Shah · Answer

@Heather Schmidtknecht sometimes are you able to finance closing costs but not always.

Honestly, what I usually do is get the property for the best price - this is the only thing I like to negotiate on. Make the rest easy for the seller so you can have the best deal. Your closing costs aren’t high enough to make or break the deal - in my opinion.

Hope that helps.

Heather Schmidtknecht · Answer

@Renata Brajkovski I heard from a friend of the seller that they were hoping not to go lower than $125,000 in case they had to pay the seller’s closing costs (that tells me they could go lower if I paid my own closing costs)... and they need to close the first week in July.  The closing date is not an issue for me... just wondering which option to offer.

Heather Schmidtknecht · Answer

@Palak Shah, if I am financing this purchase, isn’t the money I have to pay to do the deal the same with either option?

Ask for seller to pay closing costs?

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