Seller Assist

We are seeing more and more seller assist written into agreement of sales. Seller Assist is when the seller pays some of the buyer’s closing costs. Normally this is done when the buyer does not have enough cash to close the deal. This is a way for a buyer to be able to close on a property without needing to come to settlement with a lot of money.
If a buyer is purchasing a home for 200,000 and their closing costs are going to be 15,000 and they have $8,000 for closing costs they will then ask the seller for the additional $7,000 as a seller assist. The seller then agrees or disagrees to provide that assist. In essence the buyer is offering the seller 193,000 for their property. Many times I am asked the question…Am I paying transfer tax on the $200,000 or the $193,000. Sellers and buyers are paying transfer tax on the $200,000 as that is the amount of the sale.
So perhaps you are purchasing a home and you want to offer $7,000 less than the asking price. It may work well for you to actually offer the full price minus an assist and keep more cash in your pocket if the seller is agreeable.
Remember with conventional mortgages you can only obtain a 3% seller’s assist (3% of the sales price) unless you are putting 20% or more down on the property. If you are purchasing with FHA financing you can obtain a 6% seller’s assist.
The advantages to sellers is if they are willing to entertain a seller’s assist they are making their home available to more buyers who would be perfectly willing to purchase their home with a little assistance.
Interest Rates 12/14/2009
4.875% - 30 Year Conventional Fixed – 20% Down
5% -30 Year Fixed – FHA Financing