With so many different parties involved (and each charging a fee for service), closing costs can build up quickly on a home purchase. But that doesn’t mean you as a home buyer have to pay them directly.

For one, some closing costs are negotiable.

Your mortgage lender and title company of choice both have some degree of leniency in their “bottom line” costs. They may not be able to reduce a fee for you, but in the right situation, they may be able to credit for a portion of a fee.

This is because stringent industry accounting rules require certain items to appear on a settlement statement.

Another way to save at closing is to ask the seller to cover a portion of your closing costs.

If your costs represent 2% of the sale price, you can build the 2% back into the purchase price and have the seller concede it back to you at closing.

An example is when you buy a home for $400,000 with $8,000 in costs. The seller may agree to accept $408,000 from you and then “pay” you $8,000 as a closing cost credit at closing.

Rather than spending $8,000 to close on your home, the costs get spread into smaller monthly payments of $10-20 over the life of the loan.

This process is called seller concessions and is very common.

Some sellers will go even further and offer interest rate buydowns for buyers — you won’t know unless you ask!

As a home buyer, the market is hungry for you right now and this is a rare opportunity to get a deal you might not otherwise think you can get. Rather than fear closing costs, negotiate them.

This entry was posted on Tuesday, June 12th, 2007 at 2:11 pm and is filed under Cincinnati Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.