First Time Home Buyer’s & Seller Concessions July 23, 2007
Posted by Patti Shawgo in First Time Home Buyers, Interesting Stuff, Mortgage Stuff, Real Estate.trackback
One of the main ways you can get money to help pay for closing costs is through seller concessions. While I do work a number of other down payment assitance programs (such as from the State of Maryland, Baltimore City specific programs, and Federal Home Loan Bank Grants), all of these programs can be used in conjunction with seller concessions.
Many first time home buyer’s that I talk to are a little uncertain of this seller concession business, so I want to explain to you how it works. Pretty much without exception, ANY mortgage will allow the seller to contribute 3% of the sales price towards your closing costs. Many programs, especially those geared towards first time home buyers will allow the seller to contribute up to 6% of the sales.
So for an example, if you are looking at a $200,000 property, you might make an offer for that property of $200,000 with 3% seller help, or $6000. In effect, you are really only offering $194,000 for the property since the seller would be giving you $6000. So you might be better off offering $206,000 so the seller feels like they are getting the same amount as the list price, but that is for you and your realtor to decide (and btw….if you would like a recommendation for a good realtor to work with, please feel free to drop me an email at pshawgo@carrolltonbank.com, I know lots of good realtors).
What all this means for you is that you really can get into a home for very little out of pocket!
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That is all well and good – but remember that for the first time home buyer, this is usually a daunting process and thus they need to be hand held – I have had occassions when I literally had to hand hold a first time home buyer from start to finish