Simple Math

Simple Math

Everyone is looking for a deal regardless of what market we are in. If you can’t find a deal of a life time you’re at least looking to save a bit of money on your purchase. With the purchase of a home comes your down payment and closing costs. If you do an FHA loan you’ll need 3.5% down. If you’re doing conventional you’ll need at least 5% down. Closing costs are 3% of the purchase price of the home and closing costs are the responsibility of the buyer.

We’ve been dealing with a buyer’s market for the past several years. This means that there were tons of houses for sale, inventory was high, sellers were giving away their house in order to sell it because the next guy would. Fast forward to today and it’s a seller’s market, almost no inventory to speak of, high prices, and the most competitive offer wins.

Whether you’re a first time home buyer or an experienced purchaser you’d rather spend less and get more than spend more and get the same or even less. This is a pretty straightforward fact. The problem is too many buyers want the sellers to pick up their closing costs and take a price reduction. You can’t have your cake and eat it. It’s just not going to happen in today’s market.

Let’s look at some simple math. If the home is selling for five hundred thousand and your closing costs are fifteen thousand dollars you can’t ask the seller to reduce the price of the home by ten thousand plus pick up your closing costs. It’s never going to happen. I wish it were! Most buyers don’t see that when you ask for help in closing costs the seller is losing money from their net. Same thing goes if they reduce the price of their home.

If you’re in a position where you have to ask for help with closing costs you more than likely will have to cave in to the sellers asking price. If you have the funds to cover your closing costs then you have some wiggle room on the asking price of the home. It’s incredibly rare for the seller to cave in and help pay your closing costs plus give you a discount on the price of the home.

If you’re looking at purchasing before summer ends and you don’t know if you have enough money to cover your closing costs or maybe you don’t even know how you should go about negotiating closing costs or price reduction then give The Colorado Dream House Team a call and let us do the work for you. After all that’s why you’re using a Realtor anyways.

Marc Bayes is a Broker Associate with the Colorado Dream House Team, Keller Williams Realty DTC. Contact Marc at 303-619-3052,, or  

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