Seller's Choice - Help With Closing Costs

Author: Justin Lee

| Posted: 04-02-2008 | Comments: 0 | Views: 6 | Rating: (50)

(?)

Paying the closing costs is becoming more prevalent across the whole country, according to realty experts in Maryland. This may seem strange as the house price could just be dropped and it would appear that the sell/buy formula would still have the same balance.

However, this isn't quite the case; where the balance is changed is by using a lender. Almost all house purchases are not paid by cash they are paid by the cash borrowed from the mortgage lender. This means that if the house price is $200.000 and the buyer has to put 5% out as a down payment, the buyer will need to find $10,000 deposit.

The 95% loan on the $200,000 house will be $190,000. Knowing these figures, a couple or family will set about looking for their dream home at that price. Once they have found it and it is surveyed, there may be one or two things wrong with it. Perhaps the lender now says that as the property needs a new roof, they will withhold the $5,000 to replace the roof.

This will put the buyer in a predicament as most people pull out all the stops to get the house they want and there is no cash left over.

The seller looks like they are going to lose the sale for a mere $5,000.00. If the house price is dropped the buyer will simply get less from the lender, because they will get 95% of the revised (dropped) price, plus they will take off the same $5,000 for the roof. This would mean that the deal is no further ahead.

Another disadvantage with dropping the price is that all the paperwork has to be done again and this delays the transaction. Delay is never a good thing in a house sale, it can make either party nervous or the deal can just lose its momentum.

Here is where the seller can step up and say one of two things that will help. The seller could suggest he will pay for or get the roof done. The seller could also suggest that he will pay the closing costs so that the buyer can afford to add his extra money (saved for the closing costs) onto the lenders cache.

Either way, the seller has 'helped' the buyer to buy the house. This is a choice that is strictly the seller's call. It is obviously a financial loss to the seller, and a financial gain to the buyer.

Why would a seller 'give' some money to a prospective buyer? Well, if this kind of deal were to happen at all, it would only happen on the advice of the listing real estate agent. The agent will know if such an offer would 'clinch' the deal, and in fact would likely make sure that such a deal would only be offered if it did finalize the deal into a legally binding sale.

For the buyer, this means that in a buyer's market, in which it is obviously not so easy to sell a house, he has managed to retain the prospective buyer and keep the buyer's interest and money involved in the sale of his own property, thus encouraging the sale.

In the overall picture, $5,000 can probably be recouped by the seller more easily than trying to find a new buyer and waiting another two months. During the theoretical two month wait, house prices could drop further - a further $5,000.00 even! This is called cutting your losses.

It is not be an option that a seller will want to include when he lists his house, but it makes good business sense to proceed in your house selling with an open attitude that will allow for such a magnanimous gesture if needs be.

Rate this Article:

Current: 0 / 5 stars - 0 vote(s).

Article Tags: Sales, Home Selling, Selling Real Estate, Financially Assisted Sale

Article Source: http://www.articlesbase.com/real-estate-articles/sellers-choice-help-with-closing-costs-324241.html

Print article

Send to friend

Publish this Article

Author feedback

About the Author:

Justin is a professional REALTOR

Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free!

Article Comments

Add new Comment

Tips for Mobile Home Sellers
By: Nelson Stewart | 24/01/2008 | Real Estate

Home Staging Appeals to Buyers' Emotions
By: Rob Muller | 30/01/2008 | Real Estate

Ready, Set, Sell: How to Get the Most Out of you Home
By: Josh Sloan | 22/02/2008 | Real Estate

2008 Trends in Bathrooms Tempt Buyers
By: Carolyn Capalbo | 05/03/2008 | Real Estate

Selling Your Home - 5 Ways to Close the Deal in a Tough Market
By: Vicki Walker | 04/09/2008 | Real Estate

Spring is Coming, and With It, Home Sales
By: Joe Samson | 06/03/2008 | Real Estate

Competing With New House Sales
By: Jason Couillard | 14/01/2008 | Real Estate

Tips for a Quick Home Sale
By: Terry Trexler | 31/01/2008 | Real Estate

Got a Question? Ask.

Ask the community a question about this article:

Frequently Asked Questions

King size bed
By: Mona | 17-08-2008
I am looking for a decent king size bed. I am on low income, so I need something that will fit my budget..slightly used or new either one!! mabe someone is just looking to get rid of one, or down sizing?

?real estate extra sales bonus for fast sale?.
By: bob | 17-08-2008
?real estate extra sales bonus for fast sale?.

Tax on Wood Pellets?
By: Kevin | 16-08-2008
what is the sales tax on Wood Pellets used for heating my home?

What is required to be a successful outside sales person.
By: Lee | 14-08-2008
what is outside sales? How does one endure success in this unique job description? What does it take to be successful in this type of business?

I need a sales plan for exhibition and events ...
By: ayman_mok | 11-08-2008
i need a sales plan for exhibition and events industry

How do I recruit sponsors?
By: Kelly | 09-08-2008
I need to recruit sponsors as part of the tuition for my daughter's entry into an Academy of the Performing Arts program. I must sell $1000.00 worth of advertising space for the programs Showbill which will circulate for 1 year. We can opt to pay the money out of pocket but that's not an option for me. The problem is that I have no idea where to start or even how to approach a business. Helpful tips or outright step by step dircetions would be appreciated.

Q&A Powered by:

Latest Real Estate Articles

The R.E.I. Revolution On The Internet
By: Damian Lanfranchi | 06/10/2008
Understand it and thrive. Ignore it, get left behind. I want to make sure that you truly grasp how the internet is revolutionizing the Real Estate investing world. It's absolutely critical to the success of your business. It's something that a lot of the Real Estate investors and gurus are missing the boat on when it comes to their real estate investing website.

Cyprus Property is Hot! But is it Getting Too Crowded?
By: Steven Clarke | 06/10/2008
The recent interest in Cyprus property has initiated a housing boom on the island. It doesn't matter where you go on the island, you can often hear the sound of construction in the background. Developers are scooping up land at an alarming rate trying to keep pace with the growing...

Dubai Property Strong Fiscal Growth
By: Editor-123 | 06/10/2008
Fiscal growth in Dubai is progressing by leaps and bounds and the real estate market is the major attraction of this place. In Dubai, you can find an endless list of buyers investing in real estate properties that are pocket friendly.

Different Kinds of Apartments and Flats – How to Find One That Suits You
By: aena18 | 06/10/2008
To have a beautiful home is everyone’s dream but in this 21st century to have your own home is not that much easy because now everything is available in high price rate. In this expensive world now, most of the people prefer apartments and flats as their home. Apartments have lots of advantages like there are lots of variety apartments are available in beautiful locations with affordable price rate.

Flower Mound Apartments
By: Alice Shown | 06/10/2008
If you are looking for an apartment as rent or you want to purchase a Flower Mound Apartment. Purchase Flower Mound Apartments in a planned manner. Consider the different factors. Do not take a decision without a planning.

Cedar Hill Apartments
By: Alice Shown | 06/10/2008
Cedar Hill is situated in a suburban area. Highways 169, 7, 394 and 494 can be easily assessed from the place. The building offers all types of facilities and services that can give you a comfortable stay.

The Inner Workings of Interest Rates for Owner Builder Loans
By: Chris Esposito | 06/10/2008
A good owner builder construction loan will have only one closing to cover the land purchase, construction phase, and conversion to your permanent financing. Therefore, the owner builder loan will have two sets of interest rates: one while you build, and one rate for when you move into your new home. Every owner builder should understand the inner workings of these rates when planning to build.

Information of Real Estate
By: rehan | 06/10/2008
Zammen-zaidad and propertycafeteria is a very nice and well portal and all the facilaties related to real esatate and property.

More from Justin Lee

New Market Trends to Floor You
By: Justin Lee | 19/03/2008 | Remodeling
These lighter floors have been popular in Europe and are just being introduced over here in North America.

Green Houses Gaining Momentum!
By: Justin Lee | 19/03/2008 | Real Estate
Bamboo is widely used nowadays in homes by people who prefer to use sustainable resources. Bamboo wood flooring looks like hard oak wood floors but it grows in one tenth the time of an oak tree!

Step by Step for First Time Buyers
By: Justin Lee | 05/03/2008 | Real Estate
If you are a first time buyer wondering if you could cash in on the flood of foreclosed homes on the market, the first step you will need to take is to consider your options. Unfortunately most first time buyers' options are ruled by finances.

The Busy Street
By: Justin Lee | 03/01/2008 | Real Estate
It is not so easy to sell a home these days, and if you are on a busy street, it can be even more difficult to tempt prospective buyers to your door.

Creating your Own Space in your Home
By: Justin Lee | 17/12/2007 | Real Estate
How many of us have peeked in the doorway of someone else's nicely organized study and enviously wished we had the same? It may not be that we need to actually study, but it looks like a little haven to tuck away into. It is also a place to keep your paperwork gathered together and to get your bills organized.

Good Times for Good Credit in Real Estate
By: Justin Lee | 19/11/2007 | Real Estate
Good credit really comes in handy in real estate these days. A slower national property market in recent years has meant fewer buyers, and more incentives for those who can qualify for a mortgage. If you've got good credit, you can do more than just finance the home of your dreams - you can buy it at a lower price than ever before, and mortgage it for less.

Developing your Real Estate Web Presence
By: Justin Lee | 19/11/2007 | Real Estate
Real estate is often the first industry to be affected by changing Internet technology. From social networking to mapping, new applications and website tools are often first tested by Realtors looking to connect with buyers and sellers. This isn't because most Realtors are computer programmers, but because their industry demands they have a presence online.

Bundling your House Up for Winter - a Winter Check List
By: Justin Lee | 29/10/2007 | Real Estate
Furnace: - Set up a furnace check-up well before the cold weather starts, not only will it prevent the breakdown blues in the dead of winter, but it's much easier to get an appointment with your local furnace repairman before he gets busy. - Generally the filters should be checked every month and every three months for the high-efficiency models.You can save as much as five per cent on heating costs by ensuring your furnace is running as it should. - If you're considering changing your furnace

Article Categories

Article Marketing

Article Notepad

Stop Duplicate Content

Term Papers

Need Help?

Sign up for our email newsletter

Receive updates, enter your email below

Use of this web site constitutes acceptance of the Terms Of Use and Privacy Policy | User published content is licensed under a Creative Commons License.
Copyright © 2005-2008 Free Articles by ArticlesBase.com, All rights reserved. (2.07, 17)

Seller's Choice - Help With Closing Costs

Article Comments

Related Articles

Got a Question? Ask.

Latest Real Estate Articles

More from Justin Lee

Need Help?

Site Links

Webmasters

Business Info

Sign up for our email newsletter