Between the down payment and closing costs, things add up fast when buying a house! Let’s not even bring up the moving costs or the inevitable new furniture. The point is, even if you are getting a 3% down mortgage, you can expect to spend thousands, if not tens of thousands dollars from your savings when buying a house.
Let’s chop that number down. The secret is seller concessions. This is the strategy we use on a consistent basis to save our clients $5,000 and more at the closing table. Using seller concessions is a way to have the seller of a home contribute towards the buyer’s closing costs.
How it works.
Let’s say you are buying a home for $200,000 and your closing costs and down payment add up to $15,000. Assuming the seller refuses to take any less money, we could raise the price to $205,000 and have the seller contribute $5,000 towards your closing costs. The sellers make essentially the same amount of money, so it is never a big deal to them. You as the buyer however, will now only have to pay $10,000 at closing instead of $15,000! Your mortgage will be $5,000 higher and your payment will increase by around $20/month or so. After all, for most buyers, $20/month is a no brainer trade off to save $5,000 now!
Depending on the financing you will be receiving, we can often save you even more at closing! The saving could be the difference between cashing out part of your 401k, asking a relative for a loan, or just having enough money leftover to buy that wicked sweet $5,000 messaging chair from the mall you have always wanted.
Let's make it happen!
When you are ready to buy a home, leave the technical details to us. We will help you determine the maximum amount you can save, handle the contracts, and deal with all the other nuts and bolts so you can relax. For more information on this topic, or to buy your next home, give us a call today or fill out the form here!
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