Negotiation Question

[tatkins]

I seen it mentioned in another thread that offer less per point is better than closing costs and/or maintenance fees. Can someone explain why that is? If the seller will still the net the same in the end, why should they care? This allows a buyer that is financing to do so with minimal upfront money. Seems like a win win to me. Thanks in advance for the explanations.

 

[kilik64]

Assume its because they would have to pay the costs and fees as part of the deal, easier to just take less money and not have to pay out that and then get it back once everything closes. Yea net result is basically the same, but they might not have the funds readily available to pay it and wait to get it back.

 

[Sandisw]

The one thing I have heard over the years is that DVD likes when the seller pays those fees…how True I don’t know.

 

[tom1944]

The one thing I have heard over the years is that DVD likes when the seller pays those fees…how True I don’t know.

That makes sense because it costs them less to take back the contract.

 

[tatkins]

I do understand that there would be a greater chance of DVD taking said contract but again that only hurts the buyer. Is there a seller that can confirm they have to pay out of pocket if they agree to pay closing and/or MF? Or does this just come out of their check before they get it at closing?

 

[Sandisw]

I do understand that there would be a greater chance of DVD taking said contract but again that only hurts the buyer. Is there a seller that can confirm they have to pay out of pocket if they agree to pay closing and/or MF? Or does this just come out of their check before they get it at closing?

MFs need to be paid before a contract can close so those are paid and then reimbursed in the closing.

If seller pays closing costs, it is added to their side of the column and taken at closing.

But commission is based on sale price of the contract outside if fees. It may not be a ton but is extra.

For example, say the buyer offers $20k but pays MFs and closing, commission is 8%, it’s $1600.

If the buyer offers $22k with seller paying those things, their commission is now $1760.

So, their is a slight cost to seller to do it one way vs the other.

I have sold plenty and it still came down to end result but more often than not, the offers that wanted me ti cover closing and MFs were never high enough to offset that.