When is the Closing Cost paid?

[Tony Ardison]

I’m new to Wholesaling and Real Estate as a whole. I hear a lot that wholesalers will include paying closing costs in their pitches to the seller.

Is this paid out of the wholesalers pocket up front? Or is this deducted from the wholesaler’s check once the deal is done?

[Tom Gimer]

Closing costs are paid at the time of settlement, not beforehand, by the settlement agent (title company or closing attorney) through line item adjustments on the HUD/ALTA/CD settlement statement. Wholesale buyers offer to pay seller closing costs so that the seller knows their net proceeds up front.

While technically the buyer is paying the sellers’ costs, that is baked into the purchase price offered. Figure out local transfer and recordation taxes and recording fees and the typical buyer/seller split and you’ll know exactly how much to adjust your offer.