Because the buyers have to come up with a certain amount of dn pmt to get financed and don't want to have to come up with the additional closing costs. They are paid at closing and (except for va loan) not rolled into loan. So it's more money to have to come up with at closing.

Seller should think of it in terms of what they'll net. Downside is if you think your home may not appraise, you can set yourself up to have a problem, because now home needs to appraise for a higher price rather than the lower price if you had just discounted the house with no closing costs. Cover that possibility and how it would be handled if it doesn't appraise before agreeing to cc in lieu of discount.

Have the seller counter the best offer at the price the buyer offered plus the closing costs. And the seller will then pay the closing costs. The buyer gets to be the winner of the multiple offer situation, and gets his closing costs paid for and the seller still nets what he/she wants.

In a multiple offer situation, she shouldnt need to pay closing costs. If she were my client, I would be advising her to wait thru the weekend, after the open house since this is the first weekend on the market. (There are buyers that may want to see it that arent able to come during the week). I would put in the listing, Multiple offer situation, all offers due in by Monday morning 10am or something. Its the best way to pick out the most qualified buyer and the strongest offer.

If the buyers are looking for a low-down payment loan (VA/FHA), they may have such conditions to the loan as the seller pays closing expenses.

If she has multiple offers she shouldn't go for the persons with a VA or FHA loan

In certain price points, all offers will be such.

That's how we did it 2 years ago - final offers due after the first weekend. We paid closing costs for the reasons mentioned previously but the over-asking offer covered them, plus some.

As sushi says, some neighborhoods all offers will be fha (or less than 20% down.) If young families are looking they may not have a ton of cash.

It seems to be regional where the seller pays closing costs, but it happens a lot.

For those that think buyers have to go FHA or VA if they have less than a 20% downpayment, just letting you know that both Fannie Mae and Freddie Mac have programs that allow 3% downpayment. All depending on the borrowers credit profile, not price point.

Well, gee, that simple question calls for a simple answer: so they don't have to pay the closing costs themselves. If you could get someone else to pay your bills for you, wouldn't you try to get them to?

Yeah, except in the context we are talking here they are basically financing their closing costs over 30 years. It's not being "given" to them.

In certain price points, all offers will be such.

Curious as to what price points those would be, sushipup, and where you mean. Around here anything below the middle of the mid-range is cash only or don't bother. There is no possibility of anyone needing financing of any sort being the winning bidder these days, unless the property has really major flaws that would drive off an investment buyer.

Jane, I agree with the others. Unless she's in a really odd location, it's an on-fire seller's market right now in almost all of FL and she doesn't need to give them anything at all. And yes, everyone always asks, and sellers just say No most of the time.

jn3344 nailed it.

In my market (S Fl) it is common for buyers to ask for a contribution toward buyer's closing costs for a purchase less than $300k (first time buyer price point). Normally it is the buyers first home and many do not have the $18k to $20k to purchase. They have the down payment and some of the cc & pp's - but not the total amount. As jn3344 pointed out, the buyer is financing the balance of their closing costs by putting it in the offer. Both the buyer and seller win in this case because the seller is netting within $1000 of her asking price. The strength of the buyer is not just based on the amount of money in their bank account - it is also based on credit, employment, and the lender they have chosen. If you have an incompetent lender on the deal - don't choose that buyer.

writersblock, where (what county) in Fl are you?

Treasure Coast area, but I've been looking for a place in PB county. Here, a townhouse that was selling for 100K in Jan is over 150 now, and the same for many areas in PB county.

In our complex, stuff that goes on the market sells the first day most of the time, and it's all cash investment buying even at the current inflated prices and with a year wait to be able to rent them out. Banks won't lend on the total price anymore.

I'm a Realtor. There are areas where the banks won't lend - if you have too many investors in the community for example. I know the Treasure Coast area well as many of my PB clients move from here to Martin and St Lucie areas because you get more for the money there. And yes, I agree, that the SFR's in St Lucie and Martin move quickly when priced right. Here is PBC you have to pay more - and usually the seller will contribute toward cc & pp's but it takes a week to 10 days to sell and not one or two days like PSL :) BTW, under $200k here is just about impossible

Her house is in St. Pete on the Gulf Coast.

She decided to accept the offer. The Realtor is going ahead with the Open House tomorrow which I don't understand.

Jane

The Realtor is either looking for more buyers for her business or a backup for the accepted offer.

BTW, under $200k here is just about impossible

They do still come up in Lake Worth, but they are gone within hours, unless they are very dreadful. Sometimes even before the listing officially goes live.

^^^very true...

An update.

The Realtor held the Open House and it was packed with people. She told everyone the house was pending but would take back-up offers.

Two weeks later the deal with the original buyer ended. After inspection she requested many repairs and my niece refused. One was the roof (which doesn't leak). The inspector said the roof only had 5-8 years of life. The buyer wanted a new roof.

Realtor called one of the people at the Open House and she made a full price for the house.

So we'll see how this one goes.

Jane

Old roofs are a problem here. Even if they don't leak. There is a "new" rule that none of the normal insurance companies will insure a home with a roof that is 20 years old or older in the state of Florida. The insurance has to go to "outside" carrier's - which are extremely high priced. Our homeowners insurance is expensive anyway. The Treasure Coast has less expensive HOI, but it is still more than almost anywhere else in the country. I had a buyer that had to back out of a sale with a home they loved with a 21 year old roof a few weeks ago because the insurance cost was $400 per month. The HOI put the buyers over the allowed debt ratios to purchase the home. So the request for a new roof may have been prompted by the insurance company. I know it is a frequent request here when the roof exceeds 20 years.

As to having the backup offers in place from the Open House - that was a great resolution to your niece's fall through contract. Good thing she held the Open House:)

Yes, I have an acquaintance in Lake Worth who pays $5K a year for insurance for one of those little two bedroom 50's CBS houses, not in any kind of flood zone and not in a hurricane evacuation zone, either.