Can a seller refuse to pay closing costs? In short, the answer is yes. There are certain circumstances in which the seller is not obligated to contribute to the buyer’s closing costs, and can instead choose to pocket that money. However, there are also times when the seller may be expected to help out with these expenses.
It’s important to remember that each real estate transaction is unique, so it’s always best to consult with an experienced real estate agent or lawyer before making any final decisions.
Closing costs are fees associated with the purchase and sale of a home. These fees – usually amounting to 2%-5% of the home’s sale price – can be paid by either the buyer or the seller, but most often it is the buyer who is responsible for them.
Some common closing costs include:
While these are just some of the most common closing costs, there could be others depending on the particular transaction. It is also important to note that these costs are in addition to the down payment that the buyer will need to make on the home.
In some cases, the seller may be expected to pay certain closing costs on behalf of the buyer. This is often seen in situations where the sale price of the home is low, or the market is slow.
Seller-paid closing costs can include:
As with buyer-paid closing costs, there could be other fees that the seller is responsible for depending on the terms of the sale.
Whether or not you should ask the seller to pay your closing costs will depend on a number of factors, including:
If you’re buying in a buyers’ market, you may have more negotiating power and could be more likely to get the seller to cover your closing costs. On the other hand, if you’re purchasing in a seller’s market or the sale price of the home is already low, it may be less likely that the seller will be willing to contribute.
There are a few advantages to having the seller pay your closing costs, including:
While there are some benefits to asking the seller to pay your closing costs, there are also a few potential disadvantages, including:
If you’re interested in asking the seller to cover your closing costs, there are a few negotiating tactics you can use, including:
There are a few common negotiation tactics that can be beneficial for both the buyer and seller, including:
Seller-paid closing costs can be a great way to reduce the amount of money you need to bring to closing. However, it’s important to remember that there are potential disadvantages, so be sure to weigh your options carefully before making a decision.
If the sales price of the home has already been negotiated, the seller may be reluctant to pay closing costs because it would essentially mean that they’re paying more for the home.
In some cases, the seller may already be providing a concession, such as paying for repairs or offering a longer escrow period. Asking the seller to also pay for closing costs could be seen as too much of a request.
If the buyer is already getting a good deal on the purchase price of the home, the seller may feel like they shouldn’t have to pay for closing costs as well.
If the seller is already under a financial strain, they may not be able to afford to pay for closing costs. In this case, asking the seller to cover these costs could put them in a difficult position.
If the seller isn’t willing to pay your closing costs, there are a few options you can consider, including:
If you’re stuck negotiating with a seller and not currently working with a real estate agent, now is the time to find one. An experienced agent can help you navigate the negotiation process and may be able to offer advice on how to get the seller to pay for closing costs.
When it comes to real estate negotiations, there is no one-size-fits-all solution. The best approach will vary depending on the situation. However, by understanding the common reasons why a seller may refuse to pay closing costs, you’ll be in a better position to negotiate a deal that works for both parties.
Don’t go it alone. Contact our team at Shelhamer Real Estate Group. As a top-performing Los Angeles real estate brokerage, we have the experience and knowledge to help you successfully navigate the real estate market. We can provide you with guidance and resources every step of the way, from finding the perfect home to negotiating the best possible price.
Positioning the property in the market to attract multiple offers is the goal. What’s the agent’s game plan for your home? Find out the offer price and learn the marketing strategy. Is there a specific amount of time for marketing? A specific number of open houses? The best Realtor will have a plan with a proven track record.
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Glenn Shelhamer is a nationally recognized Real Estate leader who has been helping people move in and out of the Los Angeles area for many years. He is also the team lead of The Shelhamer Real Estate Group. When Glenn’s not selling real estate he can be found spending time with his beautiful wife and two terrific kids.