How To Lower Closing Costs

Closing costs help facilitate the sale of a home and both buyers and sellers
pitch in. Some closing costs can be paid before the home is officially sold and others are paid at the end.

However, closing costs aren’t set into stone and they can be negotiable. You
can ask your real estate agent or lender with help in estimating your actual
closing costs. Look over everything to make sure all the numbers are right
and then you plan accordingly in how you’re going to lower them.

Loyalty Programs
Some banks offer assistance to buyers when they use them to help pay for
the purchase. It’s a way for a bank to reward loyal customers.
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Closing at the End of the Month
Schedule your closing at the end of the month so you don’t have to pay the
per diem interest for so many days.

Get Multiple Quotes
Get estimates from different lenders because you’re looking for the best
package of closing costs and interest rates. There might be something better out there.

Junk Fees
There may be some fees a lender charges that may be negotiable, such as
origination fee, processing fee, or application fee. Make sure to ask if what
you are being quoted is the best they can offer.

Title Costs
Sometimes title insurance and settlement are bundled together. You may be able to find a title and settlement company that is less expensive.

Negotiate With the Seller You can try to negotiate with the seller in paying for some of your closing
costs. Buyers can ask for credit or to cover lender expenses during the offer
and negotiation process.

Credit at Closing vs. Repairs

When your listing receives an accepted offer, expect the buyer to enlist the services of a home inspector before the contract is complete. Even a brand-new home isn’t perfect. Buyers often use home inspections to negotiate during the buying process.

Home Inspection Purpose
A home inspection is designed to ensure there aren’t any significant defects in the home. A buyer wants to know if the roof is in good condition, the air conditioning and heating system work well and there are no noticeable leaks or other potentially costly issues. However, the inspection is not designed to give the buyer more power in the negotiations of the agreed upon selling price or enlist the seller to fix a long punch list of items. Expect to make accommodations for unsatisfactory items but a seller shouldn’t be fixing every tiny detail.

Credits vs. Repairs
If something does come up that needs to be repaired, it is often best to aim for a credit at closing versus repairing the item. Repair work can be costly, time consuming and come with unexpected issues. Doing what you can to avoid repairing items is in your best interest as an agent. A credit for the expected cost of the repair is a valid way to address the concern. For example, offer a credit toward a new roof instead of having the roof replaced by the homeowner. Potential issues that can arise from repairs include:

  • Buyers have their own ideas of what the repair should look like
  • Buyers can nitpick the entire process
  • Potential closing delay
  • Often longer than expected repair timelines

Home Repair Negotiation
Negotiations are a part of any home selling process. A happy buyer makes selling the home easier on everyone and leads to more referrals for you. As a good realtor you are there to help guide your clients every step of the way.

The A Team