Getting an offer accepted for the purchase of a home is just one step in a process. The purchase price of the house is actually more than the amount the buyer offers when closing costs are factored in.
Real estate agents don’t create closing costs. There is a state mortgage registration tax of0.0023 and them add on another .0001 for the state environmental response fund.
Some real estate companies tack on an extra few hundred and there are closing and lending fees, and a loan origination fee. There are prorated property taxes and an insurance binder.
Real estate agents who work with buyers get paid by the listing broker, who gets paid by the seller, but not until the sale closes.
There are some who say a buyer’s agent services are free and others who contend that the fee is baked into the price of the house. Either way, a buyers agent can be a great investment if she has a lot of experience, can save you money and help you make a wise choice when buying a house.
Home buyers using any kind of financing will get a good faith estimate that shows fees and closing costs. These good faith estimates must closely match the settlement statement the buyer will receive three days before the closing.
Home buyers should ask their mortgage professional how much cash they will need in addition to the down payment to cover closing costs.
Sometimes buyers finance their closing costs by having them rolled into the loan. Sometimes buyers ask sellers to pay the closing costs which doesn’t work well in multiple offer situations.
There are programs that offer assistance with downpayment and closing costs. I had one client this summer who brought a couple hundred dollars to the closing. The rest of the funds came from a kind of low-interest second mortgage.
The buyer has a place to live for less than what he would have to pay for rent and he still has funds in his savings account.