I ain’t paying their closing costs!!!

I'm writing this post today to try and help sellers understand that they aren't really paying the buyer's closing costs. In my market, Poinciana, Fl. It is very common for the buyer to request that the seller contribute towards their closing costs. In fact, the last 15 or so deals that I have closed, were all 100% financing with the seller contributing 3% or 6% towards buyer's closing costs. It's just the nature of my market. Now that it's a strong buyers market we have to take these offers seriously or we may not be able to sell the property.

Now since this is so common and expected, I always bring this up at time of listing, to try to forewarn and educate my sellers. By educating my sellers, at time of listing, it makes it easier when these offers come in. When they do receive an offer, I want them to be prepared to counter offer accordingly, without getting caught up with who pays what. But you know, no matter how well informed they are it's inevitable that they say "I ain't paying their closing costs".

Mr. and Mrs. Seller, I'm here to tell you, that you are 100% correct, you are NOT paying their closing costs. In reality the buyer is financing his costs into the loan. They will end up on your side of the closing statement but the buyer is paying. It's important when looking at an offer to concentrate on the NET figure. This is really the only figure that makes any difference. How much money is going in your pocket at closing. Everything above that line is just a manipulation of numbers. Don't dwell on who's paying what. Concentrate on what matters: how qualified is the buyer and how much will I NET. By looking at offers this way you will have a much better chance of negotiating a deal. And that is money in the bank!

In my market, when a buyer is getting 100% financing and asking for a seller contribution, more than likely, they have no money. By pulling the closing costs, out of the offer, chances are they will not be able to purchase your home. So leave them in and raise the price accordingly. By conceding on the seller contribution we can more easily negotiate other items that may be important to you i.e. an "as is" sale and post possession.

So, my fellow REALTORS®, next time you have to present an offer asking for a seller contribution, help the seller to focus on their NET. This will increase your chances of having a successful negotiation and will increase the chance of your seller getting their property SOLD. But you knew that, right?

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