amount.
Buyers might not be able to come up with extra cash for closing costs, but they can often borrow more money with their loan. Many buyers don’t realize that if you pay their closing costs, you are giving up some substantial profit on your home’s sale. You should help them realize that fact in your counteroffer. When the buyer submits an offer that includes you paying the closing costs, counter by agreeing to do so, as long as they agree to the higher price you’re proposing for your home.
SHOW ME SOME NUMBERS, PLEASE!
If you agrees to cover 3% of the buyer's closing costs, you can recoup most of it by negotiating a higher purchase price. Here's how it works for a $1,250,000 purchase price:
1. Calculate the closing costs you'll cover: $1,250,000 × 0.03=$37,500 2. Add the closing costs to the purchase price: $1,250,000 + $37,500 = $1,287,500 3. Final Adjusted Purchase Price: $1,287,500
In this scenario, the buyer effectively finances the closing costs through the increased purchase price. This can be an appealing strategy if the buyer's lender allows such adjustments and the property appraises at the higher value.
(These numbers are only approximations.)
Ideally, this approach allows you to get back most of the money you invested for closing costs. However, there is one major hurdle that could hinder you.
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