Can Buyers Ask Home Sellers to Pay Their Closing Costs?

First off, how closing costs are handled may differ from state to state. This advice applies to North Carolina. If you’re buying elsewhere, make sure you discuss your options with your Realtor.

So, what are closing costs? For those who are unaware, they are the fees incurred from the process of conveying a piece of real estate to the buyer, including underwriting fees, discount points, processing fees, recording fees, title insurance fees, etc. Buyers typically pay 2-5% of their purchase price in closing costs. View more hidden costs of buying a home.

Not many buyers are aware that they can ask a seller to pay their closing costs. Should they? It really depends on the term of the offer and the financial position of the buyer. That’s something you’ll have to discuss with your Realtor, but about half of all contracts include seller paid closing costs.

Why would a seller want to agree to paying the closing costs of the buyer? It would mean their home would sell quicker. A couple of examples as to why this may be: 1) the buyer may not have the funds to meet the listing price, provide a down payment, and pay closing costs or 2) it could be an opportunity to entice buyers to make offers on one property over another. We often see the latter from builders of new construction.

Does this mean the seller has to pay the buyer cash? No, the closing costs would be taken out of the proceeds of the sale, so it would all be on paper and part of the documents signed at the closing table.

Doesn’t that mean the seller is losing money? With proper negotiating, the seller will still get the fair market value for their home with the closing costs included in the contract price. The catch is that the home must appraise at or above that price to meet lender requirements.

If you’re considering buy or selling a home in the Wilmington area, we’d love to discuss your options. Give us a call at (910) 202-2546 or send us a message through our Contact page.

About the Author
Meghan Henderson
Meghan is the Marketing Specialist for The Cameron Team and a published author of two young adult books. She also creates digital and printable planners and trackers, as well as coloring pages for Larkspur & Tea.