Who pays closing when working with Wholesaler?

[Mareno Rathell]

The last several Wholesalers I’ve worked with had the buyer pays all closing cost in their canned contract as though it’s a given rather than negotiable.

So my question is, is it common practice to just assume buyer pays closing when working with a wholesaler?

[JC Wu]

I just sold my rental in Jacksonville FL to a local wholesaler (closed yesterday). The buyer/wholesaler paid all the closing costs. The only thing deducted from the gross sale price for the seller/me is the prorated property tax of this year. 

What I learned from my experience is that you gotta be extremely careful with the wording of the provision regarding closing costs in the purchase and sale agreement. 

In my case, the original wording in the PSA was "Buyer and seller agree to pay customary closing costs." I caught it and brought it to the buyer's attention. The buyer assured me he'll pay all the closing costs and their company website also states they'll pay all costs. So he changed the provision to "Buyer will pay customary closing costs." 

During closing, the closer from the title company sent me the ALTA Settlement Statement and I was shocked to see ~2K in closing costs deducted from the gross sale price, including over $600 of the title insurance premium. I called the closer and told her she must have made a mistake in the calculations or misread the PSA. She said the wording was vague and subject to misinterpretation. She interpreted it as since buyer pays customary closing costs, and it's customary in Jacksonville for buyers to pay part of the closing costs, so that means the seller should cover the rest of the closing costs. I then contacted the buyer/wholesaler in panic, thinking it must be a contract trap, to which he said he'll fix the situation right away and let the closer know he'll pay all the closing costs. Luckily, this is a legitimate wholesaler and it closed as expected. 

So in conclusion, if the buyer agrees to pay the closing costs, make sure it says "Buyer will pay ALL closing costs" on the PSA. Don't leave any room for misinterpretation.