AgentMortgage

More home sellers stuck paying buyer’s closing costs

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

"The market is not doing well here and we agreed to pay up to $8,000 of the buyer's closing costs. Is there anything I can do to keep the amount as far below $8,000 as possible?" At this point, no. If you agreed to pay "up to" $8,000 of the buyer's costs, you will almost surely end up paying $8,000 or very close to it. The reason is that any part of the $8,000 that is not needed to pay lender fees or third-party fees can be used to pay points that reduce the borrower's interest rate. If the excess isn't used to buy down the rate, it probably will end up in the pocket of the loan officer or mortgage broker. Where it will not end up is back with you. It is common practice for home sellers to pay all or part of a buyer's mortgage settlement costs. Paying $308,000 for a house with the seller committed to paying $8,000 in settlement costs is better for a cash-short buyer than paying $300,000 without the commitment because it permits a larger loan and ther...