OfflineI am in the dark about closing costs. Who ususaly pays them? When the buyer asks the seller to pay closing costs, do they mean all of the closing costs or just the sellers portion (does the seller have a portion?). How about the agents comision?
Is my understanding corrrect that the closing costs are paid usualy by the buyer and agents commision is usualy paid by the seller, BUT these are negotiable?????
Also I have heard it stated that closing costs are 2-3% of the purchase price....Is the 3% just my portion or is it the portion of every one??
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"dump the clutch and nail the throttle"
"Just do it, Get it Done!"
--Matt Larson
Hi JGL125,
Closing cost are the buyers responsibility, it is very common to ask the seller to pay all or a portion of the closing cost (typically I always ask the seller to pay up to 3% of purchase price towards buyers closing cost) and that's how I put it on the purchase contract. The seller has there own closing cost but this is something I always try to negotiate in the deal. the agents commissions is always paid by seller. the only reason they would not is if you are dealing with a for sale by owner deal. I hope this helps.
Thanks,
Shah
so there are closing costs for the buyer and seller.?
is 3% of purchase price the rule for each side?
"dump the clutch and nail the throttle"
"Just do it, Get it Done!"
--Matt Larson
Ok, don't get hung up on a percentage. There are various closing costs that differ with each deal. The buyer pays some and the buyer pays some and some they split.
The escrow fee is customarily split. Real estate taxes are prorated. The seller pays for one type of title insurance insuring the buyer is getting the right property and that they are receiving the title free and clear except for the accepted items. The buyer pays for title insurance for the lender.
The seller pays for the commissions.
The buyer will have fees relating to their loan-loan fees, recording fees, credit report, loan document fee, etc.
If there is a lender involved in the transaction, they have to give the buyer/borrower a Good Faith Estimate of Closing Costs which will detail the fees involved with the loan.
good stuff.
what is the best way to calculate costs when running numbers on a property that you are trying to wholesale, so that you know if you are getting your buyer a good deal, sometimes it may seem like a good deal until you subtract out the costs besides rehab....
"dump the clutch and nail the throttle"
"Just do it, Get it Done!"
--Matt Larson
When calculating costs you need to make sure that you start by figuring out the FMV of the property and then make your deductions from there. Your deductions will commonly be;
1- Rehab costs
2- Closing costs
3- Holding costs
4- Realtor fees
5- Buyers profit
6- Your profit
After deducting your costs, the number that you come up with will be your top offer price. After running your numbers, look at the margins and make your decision.
Good Luck!
what is the best way to calculate
Closing Costs? I have heard 3% is good, and is that for buyer and seller?
when you buy --3% costs to you, 3% to seller?
when you sell--3% costs to you, 3% to end retail buyer? (if flipping)
"dump the clutch and nail the throttle"
"Just do it, Get it Done!"
--Matt Larson
This is a formula, previously posted by one of the coaches nstreet, that i've used and have found it to be fairly close to what actual closing costs would be. Hope this helps!
Offer Formula in everything else forum
http://www.deangraziosi.com/node/3975
Rachael