How to Convince the Seller to Pay for Closing Costs

Buying a home comes with many fees, and after the down payment, the closing costs make up the biggest chunk of these expenses.

Closing costs are the amount you must pay to close the sale and have the property transferred to your name.

These costs may include, but are not limited to, the following:

Your mortgage lender is obliged to declare all these fees within three days of approving a home loan in what is called a “good faith estimate”.

The total amount will depend on the location of the property and its value. According to Investopedia, buyers pay anywhere between 2% to 5% of the sales price on average.

The good news is that it’s possible to ask the seller to shoulder the closing costs even if they are not obliged to do so. Here’s how.

Pay the full price

The seller may be more amenable to paying the closing costs if you offer the full asking price for the property.

Sellers’ representatives often expect buyers to offer a less than the asking price, which is why they advise sellers to pad the asking price just slightly so that they can have more room for negotiation.

For instance, if the seller wants $450,000 for a house, their agent might set the asking price slightly higher at $460,000.

So if you offer to pay the full price and ask for some assistance with the closing costs, the seller may be more receptive to your success.

Meet them halfway

In some cases, the seller simply can’t shoulder the full amount – between their Realtor’s commission, staging costs, capital gains taxes, and down payment for a new home, they may have little money to spare. But don’t let this prevent the sale from going through.

Ask them if they’re willing to make a partial contribution. Every little bit helps.

Or, you can determine how much money you can put towards closing costs then ask the seller to pay the difference.

Close quickly

Depending on the seller’s reasons for putting the home in the market, such as divorce, work relocation, retirement, medical emergencies, or a death in the family, they may be in a hurry to sell. This is also true if they need the proceeds of the sale to make a down payment on another home.

That’s why you should make it clear that you want to close the sale quickly. You should also show proof of your readiness to buy a home, such as a pre-approval letter and bank statements indicating that you have enough cash for the down payment.

It normally takes 30 days or more to close a sale. If you can expedite the process, a motivated seller might be more willing to shoulder the closing costs.

Don’t make excessive demands

Most sellers aren’t willing to spend time and money on home improvements prior to selling. To convince them to cover the closing costs, you may agree to purchase the house “as is”, which means that you will not request any repairs, upgrades, and improvements.

However, this may backfire if the property has serious damage, so don’t skip the home inspection. Make sure that it is in good condition and that any major repairs won’t be necessary later on.

Ready to buy real estate in Boulder, Denver, and other Colorado communities? The Noel Team is here to assist you. You can reach out to us here and at 303.774.9400.