They’re lots of misconceptions on this topic. Â It seems, sellers think buyers should pay for just about everything, and many buyers want sellers to pay all costs (thus reducing their required cash out of pocket). Â The truth is the answer as to “who pays?” is negotiable.
So, when it comes to closing costs, what exactly are we talking about? Â On the seller’s side are real estate commissions, legal fees, pro-rated real estate taxes, and owner’s title insurance. Â Sellers almost always pay the commissions; and pay the other items as well more often than not. Â On the buyer’s side are inspection fees, appraisal, loan fees, homeowners insurance, and escrow set-up costs. Â Buyers pay these almost always, unless they can negotiate to have the seller pay some or all of them. Â Generally speaking, sellers pay buyer’s closing costs most often on lower-priced homes and on deals where the buyer has a limited cash down payment (say, like 5% or less). Â
Sometimes the amount of buyer’s closing costs 
that seller can pay is limited by law. Â For example, VA loans only allow the seller to pay buyer’s costs up to 4% of the price. Â With FHA that number is 6% and with Conventional mortgages it is 3% if the buyer puts 10% or less down, and 6% otherwise. Â On contract transactions their is no limitation.
Like so many things in a real estate deal, who actually pays closing costs is negotiable. Â If you have questions about how to best structure a deal so it works for you in your specific situation… call, text or write. Â I work harder to make good things happen!
