Does the Buyer or the Seller Pay for Closing Costs?

When it comes to who pays for closing costs in a real estate transaction, there will be closing costs that are unique to both buyer and seller. The buyer can incur costs that are equal to 3% to 6% of the sales price of the property. Each party is responsible for paying their own costs at closing. However, if the market is in the buyer’s or seller’s favor, it may determine if either party negotiates paying some of the other’s fees and costs in order to make a deal.

Most of the buyer’s costs are associated with the loan. The biggest costs incurred for a loan will be the loan origination fee and any discount points paid to buy down the interest rate. Other costs may include those for an appraisal, HOA assessments, prorated insurance and taxes.

The seller’s biggest closing cost liability is paying the real estate commission. Other fees would include paying the title insurance, transfer taxes and prorated property taxes.

In a buyer’s market, it may have been negotiated that the seller pay for some of the buyer’s closing costs, called seller concessions. In a seller’s market, a buyer may offer to pay for some of the seller’s closing cost liability, such as the title insurance or the home warranty plan. If a buyer does this, it increases the seller’s net proceeds and gives the buyer an advantage in a seller’s market.

Whether you are a buyer or seller, I can help you use the anticipated closing costs to help complete a sale to your advantage. Call or email me today and we can go over your specific goals and circumstances. I am always here for you to provide guidance and help you navigate all aspects of the sale.

Do These Additions Add to Your Property Value?

There is no guarantee that every addition or upgrade that you make to your property will give you a positive return on your investment. If you are considering selling your home in the near future, note that these additions may not enhance the value of your property. Also, keep in mind that do-it-yourself projects, if not done professionally, could detract from the value of your home.

Remodeling your basement to add bedrooms or living areas may be a detriment to value if you haven’t checked with government entities as to proper ceiling heights or legal egress or if certain added square footage counts if it is below grade. It is important to obtain the necessary permits for any such alterations.

While a garage conversion may seem like a good idea to provide extra room for the kids or a place for your mother-in-law, it may take away from the value when you sell in the future. You may lose those buyers who need ample garage space.

Buying or leasing solar panels for your home may increase its marketability but not necessarily increase its value dollar for dollar invested. If you have leased the solar panels, some buyers may not want to assume the responsibility of the expense of the lease, which could also affect their loan approval.

Upgrades to your home may enhance your lifestyle but not the value of your home. If you’re considering any upgrades, call or email me to check. I am here to help you make the right decisions when investing in your home.