I have often heard from agent that they are afraid to ask for their buyers' closing costs to be paid by the banks. The agents believe that if they ask for closing costs, their clients' offer will never be reviewed, let alone accepted. Let me tell you about my experience.
Over the last year, all but one of my buyers had their closing costs paid by the seller. One of my clients paid a small amount towards their closing costs. In a recent deal I worked on, I represented the seller for a short sale property. The negotiator started the deal stating that the bank would not pay any portion of the buyers' closing costs-period. By the end of the deal, the bank did pay $1,500 towards the buyers' closing costs. On another short sale deal where I represented the buyers, during the home inspection, the home inspector discovered that at one time in the home, there was a major fire in the attic. The home inspector was concerned about the integrity of the roof and suggested we have a structural engineer inspect it. Well, you can imagine how deflating that news was. I thought the deal was over, but I didn't give up. Long story short, the bank paid $10,000 to have the roof repaired, paid $2,000 towards termite repairs and all of my clients' closing costs!
On the flip side of the coin, I have heard of some buyers' agents that will ask for more than 3% towards closing costs-sometimes up to 10%! Their thinking is their client can use other 6% to pay down their clients' rate. I have not, and will not ask that of a seller.
My point is simply this-at least consider asking the seller to pay your buyers' closing costs. When putting an offer together, asking the seller to pay the closing costs should be considered and discussed with your buyers. Although not all sellers will pay closing costs, if you don't ask, they usually will not offer it!
Well, if you have been watching the news or reading the paper, you probably feel as though the real estate market is busted. While there are a lot of struggles with this market, it's not all doom and gloom. Although the reports say the "sky is falling," now is the time to buy! We are seeing more investors coming into the market with cash. If they see the value, so should we!
From my own experience working in the market, I'm seeing lots of buyers out, multiple offers on homes and great loans/down payment assistance for buyers. Right now, we are seeing homes priced at 20% to 30% under value, with some sellers are paying the buyer's closng costs! With the many different loan and down payment assistance programs, and lots of homes for sale, a first time homebuyer can get into a home with very little money.
I saw a newspaper article on Friday (10/3/08) that stated the San Diego real estate market will continue to go down over the next two years. Yet, I'm seeing almost daily on the MLS that homes, especially bank owned properties, are selling for more than their asking price and are off the market sometimes within a week! Once a buyer gives me a list of homes that they want to see, I will call the seller's agents to find out if there are any offers. I would say that 98% of the time there are mulitple offers on that property! Sometimes these properties have only been on the market for 2 days.
So, with all that said, do I believe that the market will continue to go down, no. But, I do believe that with all the changes in lending and the "bailout," inventory will start to dwindle. What does all this say, now is the time to get off the fence and buy!
Your San Diego Real Estate Professional specializing in first time homebuyers, investors and distressed properties for both buyers and sellers.
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