The HIDDEN Cost of Sellers Paying Your Closing Costs

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[xephael]

Technical disagreement... but the seller doesn't pay for ANYTHING in almost all real-estate transactions. They make concessions on the price. Saying they're paying for closing costs actually just means they're decreasing the overall price of the property. The buyer is the only participant paying out money.

[meemerzgaming]

Is this true?

My friend in RE told me the best way to use a seller concession is to convince the seller to not give you a concession at all and instead reduce the price of the house by the concession amount. This benefits EVERYONE except the realtors and title company because everyone then pays less fees for title policy and closing and less in commissions. The seller and buyer both end up with more money in their pockets and the buyer starts with increased equity and a lower loan to value ratio, potentially giving them better interest rates as well.

[momof]

I rather take the money to close. As a first time home buyer I need to get into the house not be concerned about what the difference will be in 10 years. Most first time home buyers just need to get in the door we have no money😂 give me the closing cost assist PLEASE

[captainviper]

The "final price" is used to calculate agent fees and permanente taxes. Focus on the purchase price as much as possible.

[captainviper]

Buying down the rates is the same thing as paying interest up front. Your just giving the money to the lender to feel better with "accounting magic"

[johnlemus]

Yearly Roth IRA contributions are capped at 7k per person just a heads up. Also Roth IRAs are accounts not investments . Investments are the stock, bonds, funds, etc you choose in the Roth IRA

[Southpaw-qcgh]

In this housing climate.

Option #4 All day. I would then divvy it up, buy the rate down and put the other half into a price reduction. Easy peezy lemon squeezy. You da man Javi

[flauze]

my parents lived in their house for 30 years, I plan on living in my future house for 30 years...this concept of moving every 5 years is so strange to me

[Andres_]

Deciding between buying a house for less and having seller-paid closing costs is a nuanced choice in the real estate realm. Purchasing a home for less may seem enticing, but it can come with hidden issues such as potential renovations or repairs. On the other hand, opting for seller-paid closing costs might ease immediate financial burdens but could lead to a higher overall property cost. Balancing these factors is crucial, and seeking advice from an advisor can provide valuable insights.

[BKLNHobo]

Points are prepayments of intrrest that have a "break even" point which can be determined via a calculator. The farther out that break even point is, the more likely it is that you will sell before breaking even and thus lose money on the points purchase.

[brianadams]

Got those girl scout cookies the other day they were awesome tell your daughter thank you.

[slickfox]

Always always apply concessions to closing cost it's up front money you don't have to spend. You can always make additional payments towards principal.

[genezis]

Hey Javier, so my wife and I ended up doing options 3 and 4. We asked to drop the house price another $10k and then asked for $25k incentives. We used that money to buy down the rate to 5%. We closed back in January 20.

[ironvoice]

I would use the 10K to lower the price. If I end up living in that place for many, many years, I will be saving on taxes for those 10K and I will have more equity in the house which will make it easier to refinance if needed.

I would also much rather throw money into the principal rather than investing since amortization will eat whatever most people make investing any extra available money.

[ViralRivers]

This is super confusing all over the place. Comparing the balance outstanding after 10 years when they are lower payments doesn’t make any sense. It’s pretty simple, how much interest did you save. If you want to compare apples to apples you should make the payment amount the same for both scenarios, where you actually pay down principle faster and save even more interest

[danaconda]

I am looking to buy in Southern NH and there is no juice to squeeze. Inventory extremely low and tons of perspective buyers leading to list and sales prices continuing to rise

[joelballard]

I’m all in on the lawsuit against the NAR. A buyer, if they choose to use a realtor, needs to pay for the buyers agent out of pocket. A seller, if they choose to use a sellers agent needs to pay the sellers agent out of pocket. Those two transactions never should cross paths. It’s a massive conflict of interest for the buyers and sellers agent to ever been on the same transaction.

[amanacatandhisdog]

If a cash sale obviously only a reduction for the final price is smart. I know that isn’t an option for many. Or seller repairs to property etc.

[Jalos]

hi Javier, i am about to give up on buying a house. I am single with 90k put aside for a house (i have been saving for 4 years specifically for a house). 827 credit score. prequalify for 450k house but i would be house poor if i get a house that high. 6760 gross and 4500 net. nothing decent exists below 400k unless its a condo and fork up 400$ in HOA fees. I live in Sacramento CA. Wanted a house near my job in Natomas. interest and prices have killed my dream.

[johndoes]

Once pmi removed is buyer responsible for insurance premiums and taxes conventional mortgage? Thanks