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Author Topic: Closing costs on buying a home??  (Read 1253 times)

NoUsername

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Closing costs on buying a home??
« on: October 30, 2008, 09:36:59 AM »
I am looking at buying a house in the low $300's sometime next year.  I was shocked to learn that closing costs can be 3 to 6%.  I have been saving a lot in an effort to have a 10% downpayment, and I am a little depressed to know that more than half of this could potentially be blown on fees.  If I buy a home for $325k and have to pay 6% closing costs, that is $19,500 down the drain.  What is involved in this that could cost anywhere close to $19,500?!?

Is there any way to minimize closing costs?  Is 3% more common than 6%?  I have heard that sometimes the seller will split it with you, how common is that?  Any info would be appreciated.

hbb

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Re: Closing costs on buying a home??
« Reply #1 on: October 30, 2008, 11:18:14 AM »
This seems somewhat high for a buyer's costs - are you in some sort of loan situation where you are paying a lot in points?

NoUsername

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Re: Closing costs on buying a home??
« Reply #2 on: October 30, 2008, 02:37:05 PM »
$5k would seem a lot more reasonable.

flyaway

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Re: Closing costs on buying a home??
« Reply #3 on: October 30, 2008, 03:05:06 PM »
I think the default is usually 3%... 1.5% for each real estate agent, paid by the buyer.
Michigan Law Class of 2010

TheDudeMan

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Re: Closing costs on buying a home??
« Reply #4 on: October 30, 2008, 04:25:23 PM »
It's negotiable usually like anything else when buying a home.

thorc954

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Re: Closing costs on buying a home??
« Reply #5 on: October 30, 2008, 04:39:11 PM »
I watched a show on tv (which is where I get all of my knowledge on everything from).  Anyway, the couple could barely afford the down payment.  When it came to closing costs, there was no way they could meet the high price.  So, they negotiated with the sellers to increase the offer price and have the sellers pick up the closing costs.  The seller was not out any money, and the buyer did not have to pay the closing costs up front.  Not sure if this is allowed everywhere (I think this was in Virginia) or if your seller will agree to this, but it could possibly keep you from having to pay a lot out of pocket.

Good luck, and you are lucky to be in a market where you can buy for 300K.  So jealous. 

flyaway

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Re: Closing costs on buying a home??
« Reply #6 on: October 30, 2008, 05:08:35 PM »
We did the same thing for our buyers re: upping their offer price to cover closing costs. 
Michigan Law Class of 2010

x

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Re: Closing costs on buying a home??
« Reply #7 on: October 30, 2008, 05:35:00 PM »
So, they negotiated with the sellers to increase the offer price and have the sellers pick up the closing costs.  The seller was not out any money, and the buyer did not have to pay the closing costs up front. 

FYI - If you do this you are paying interest for 30 years on your closing cost. 

thorc954

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Re: Closing costs on buying a home??
« Reply #8 on: October 31, 2008, 12:31:07 AM »
So, they negotiated with the sellers to increase the offer price and have the sellers pick up the closing costs.  The seller was not out any money, and the buyer did not have to pay the closing costs up front. 

FYI - If you do this you are paying interest for 30 years on your closing cost. 

def, but you have more money to put down which may mean a lower interest rate in the end...

themanwithnoname

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Re: Closing costs on buying a home??
« Reply #9 on: October 31, 2008, 08:45:18 AM »
don't buy a house where you can barely afford a 10% downpayment and housing prices could still drop.