What are the seller settlement costs?


Seller settlement costs are basically negotiable. In a constrained real estate market, sellers are often willing to pay some of the settlement costs on behalf of the buyer - they could contribute to the down payment or settlement (closing) costs to make the home sale a fact.

Often, a buyer would prefer to take a loan of, say, $207,000 with the seller contributing $7000 towards closing costs rather than a loan of $200,000 where closing costs have to be paid out of buyer's pocket.

Sellers paying settlement costs for the buyer is, in fact, a widespread practice. The only requirements are that the appraisal is reported correctly, and the seller's contribution to buyer's settlement and closing costs falls within lender's guidelines.

Accepting seller’s contribution to closing costs and/or down payment outside official agreement is fraud.

Don't let anyone talk you into secretive seller's contribution. It is a fraud. Also, do not let the broker benefit from the raised loan amount. The seller's contribution to closing costs should be used to cover settlement costs and, if any cash is left, for buying down the rate.

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