What does it really mean when the buyer asks a seller to pay closing costs? Let's say that the buyer is putting in an offer on a $200,000 home and they are going to make a full-price offer and ask for the seller to contribute to the closing costs. A few things to consider is what is allowed with the loan product. Each loan is a bit different in what they allow. And this should be confirmed prior to submitting the offer with the loan officer. But remember, that making a "full-price offer" and asking for closing cost is not a full-price offer. The reason for that is this—because the buyer is asking the seller to take a reduction in price so the buyer can finance their closing costs. This ends up meaning the seller really isn't paying the closing cost in the end. The buyer is paying their own closing costs by financing them. The highest allowed "seller contribution" I am aware of is 6%. Here's how the math would break down on this "full-price offer." Buyer offers the seller: $200,000 with a 6% contribution from the seller for closing costs. $200,000 x 6% = $12,000 $200,000 - $12,000 = $188,000 The buyer may be making a "full-price offer" at $200,000 but by asking the seller to take $12,000 less than what they are offering the home at. This ends up computing to an offer of $188,000. For some buyers, they may really need to finance the closing costs, and this option allows them to do this, while also allowing the seller to obtain their goal of selling their property. For buyers though, it's important to remember there are things that can and cannot be included in closing costs. And how that is worded in the Offer/Purchase & Sales agreement will make a difference, in addition to what the loan product will allow. There are many great ways to help buyers and sellers negotiate and work out these details—and it helps to have an agent work through this with both parties. I am ready, willing and able to help you navigate these questions and negotiations. Any of our full-time Peabody & Smith Realty agents are ready to help. Feel free to give us a call or email us at info@peabodysmith.com to learn more.