Seller Paid Closing Costs Make A Big Difference
David and Nancy spent months searching for their dream home, but none of their offers were accepted due to a very competitive housing market. When they saw things begin to shift due to talk of rising interest rates, they got to thinking…
David and Nancy brought their home search to a halt. Not out of fear, but out of intrigue. What would rising interest rates do to the market? Would prices fall? Would the demand ease? Would perks change? Yes, yes, and yes. They knew they would have a better chance at getting an offer accepted with less competition. They just had to wait a little bit.
Prices did lower a bit. With fears of higher mortgage rates, the number of buyers lowered and bidding wars all but ceased. But the real kicker for David and Nancy? Their old friend, seller-paid closing costs.
Working with their Realtor, they found a home they loved, in the neighborhood they wanted. When it came time to work out the deal, their Realtor negotiated for the Seller to pay for $7,500 in financed seller-paid closing costs.reducing the amount of funds David and Nancy needed to bring to closing. In a time of recession and economic uncertainty, keeping $7500 in your pocket is a great day!
With an accepted offer, it was time for them to sell their home. They actually employed the same strategy in the sale of their own home; they knew that seller-paid closing costs also meant far more to the buyer of their home than a comparable price reduction.
The moral of the story? A price reduction isn’t always the key factor. Allowing a chunk of cash to stay in the buyers’ pocket allows them to use it for buying down points off their interest rate, improvements to the home, or peace of mind.
If you’ve got questions regarding the impact of the shift on your search or the value of your home, we’ve got answers!