Should Sellers Be Paying Closing Costs?
I'll start by saying that there is no right or wrong answer to this question. It comes down to one thing: if helping the buyer with closing costs is the only way this deal will close, is that worth it to you as the seller?
You could argue that it's not the seller's responsibility to pay for closing costs. That is a buyer expense of getting a loan. Across the country, it is not normal for sellers to help pay closing costs. However, in Georgia, for whatever reason, it is pretty common. How much, of course, varies. That is all part of the negotiation.
Typically it costs about 3 percent of the sales price to close a loan. Many first time buyers who are getting an FHA loan will need some help paying for closing costs, as most of their cash is tied up in their down payment, home inspection, and the appraisal.
The type of market that the seller is in will also dictate whether or not they end up paying some closing costs. If it is a heavy seller's market where their listing is crawling with buyers, they will probably be able to get away without paying much, if any, closing cost. If it is a buyer's market and their listing is not getting much activity, it is probably in their best interest to pay some closing cost in order to get the one buyer who actually made an offer across the finish line.
Again, it all comes down to what it's worth to the seller. If a deal falls apart because the buyer needed some help with the closing costs that the seller was unwilling to pay, how many more mortgage payments will they end up paying before they find another buyer who doesn't need any closing costs covered?
If you are seller here in Kennesaw, or the surrounding areas, as of the date of this blog post, we are in a seller's market. Depending on the amount of traffic your home is getting, you may be able to get away with not paying any closing costs. However, don't be surprised when you get an offer that asks you to. Ask yourself this question, "What is it worth to me?"