Giving Buyers Closing Cost Assistance

There have been so many changes recently in the mortgage market and lending guidelines that more and more buyers are finding themselves a little short when it comes to the amount of cash they will need to successfully purchase a home. At the same time, homeowners are simply trying to calculate their profit when selling. Giving buyers closing cost assistance can make your profit take a bit of a hit, but can also get your home sold ahead of your competition.

Insurance premiums in some parts of the city have more than doubled, FHA down payments have increased by 1/2%, seller funded down payment assistance has gone away and 100% financing is something relegated to outside of the city.  These changes have resulted in many buyers asking for assistance from sellers with their closing costs in order to buy their new home.

Rather than focusing on the bottom line, the typical response I get from a seller is “why should I help them buy a home?” 

My advice is always to take a step back.  Forget that part of the offer includes closing cost assistance and look at the BOTTOM LINE only.  For example, if you receive an offer of $200,000 with $5,000 requested for closing cost assistance, it is the same thing as receiving an offer of $195,000.

Would you accept an offer of $195,000?  If your answer is yes, then take the offer and give the assistance!!!  Don’t allow the fact that you may not have needed the same type of help to purchase your home bias you against what might be the best offer with the best overall terms.

The only way to know for sure that an offer will work for you is to meet with your agent and have them review not only the terms of the offer, but what your net profit will be after paying off your mortgage(s) and paying your closing costs and broker commission.

If the bottom line works, congratulations…you’re on your way to successfully selling your home.