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Hi, I'm Keith Gordon I'm the broker for the website
GetMoreOffers.com and ADDvantage® Real Estate Services the topic is
how to counter a
buyer or a buyer's agent that makes an offer to you and requests
closing costs or seller concessions we call it, they of the ask for
3%, 4%, 5% percent back
of the sales price to help them close a loan the reason why they do this is they don't
have the money
so they have the down payment maybe it's FHA they have the three and a half
percent down
but they don't have the four percent
their cost to close the mortgage so they say okay seller help me out
now the risk in this is that if you add that
closing cost to the contract and you inflate the contract by
four thousand dollars or five thousand for closing costs
that means you sold the house that much higher
which means you can have to appraise the house for that much higher so if the
appraisal doesn't come in because
you move the contract up a little bit to pay for this extra cost for the buyer
you have a risk of not getting this deal done so you do NOT want to take
a deal that asks for closing costs
if it jeopardizes your appraisal. How do you know?
You don't totally know but you need to do some research on that
If I'm representing you as your agent with Professional ADDvantage®
you bet I'm gonna be looking at comparable sales to see
if that deal is going to fly with that
higher contract price because if you get a price
home for sale for 150 thousand and they've offered you 153 thousand
for
you know in exchange for six percent back at closing for closing
costs
you weren't anticipating selling for 150 you were thinking of selling for 145 maybe
but now you're selling for 153 what if you don't appraise for 153
you don't have a deal so it's a waste of your time, took you off the market, so you
got to be very careful about
getting into a deal like that not because it's wrong
just because the appraised value makes it more difficult to get the home
appraised.
The other way to counter it is
you can give them option A and option B
option A, option B, this is kinda interesting so you can say okay
I give you this price and this much closing costs
that's "Option A" or I give you this price and this much closing costs
as "Option B" it's sort of interesting because you don't know how much cash the
buyer has the buyer might have more cash they just don't wanna put their cash in
the deal so they could be asking for closing costs so you don't know
what the real story is with the buyer don't assume you do know because
you don't and if you do and you assume you'll be wrong every time because I know;
I've been down this road so
assume you don't know how much cash the buyer has and see if you can give
them different choices and actually it's a real creative way to counter counter
a buyer especially when they ask for closing costs giving them an "Option A"
and "Option B", just make them different
and one would be less
closing costs help for them and one would be more
and that way they can say, "Oh I like Option A , and just all of the sudden you
got a deal so it's not just like one answer it's a
either-or so that's another suggestion that you might use. But anyway that's my take on
closing costs. There's nothing wrong with it just be careful with appraised value
and if you have any questions, give me a call!