When Can Home Buyers Ask Sacramento Sellers to Help with Closing Costs?

With rising prices in Sacramento, some buyers need help with closing costs. If you look at a median priced home in Sacramento, which is now $375,000, a minimum down payment is about $13,125 for FHA. It will take an additional $11,250 to cover closing costs. The grand total for a first-time home buyer is $24,375. That’s a lot of money for new buyers to scrounge up and save. Many buyers look to the bank of mom-and-pop to help out, or they ask the seller to help with closing costs.

The main problem with this approach to ask for help with closing costs is the seller most likely does not want to give the buyer a 3% break. Sellers are already paying around 6% for commission, plus another 1% or so for their own closing costs. On a $375,000 sale, that’s $26,250. Which is more than the buyer’s total down payment plus closing costs. You can see why sellers might not be overly eager to help out.

However, a seller who has a bit of trouble selling a home might be open to help with closing costs. Buyers might look at homes that have been on the market for a while. Contrary to popular belief, there is not always a defect in a home that has accumulated longer days on market. Maybe it was rented and the tenants refused to cooperate with showings? Maybe the new construction around the corner finally dried up and stopped diverting all of the buyers? Maybe the seller made a few improvements that now enhance the value? Or maybe the seller was out of town, or ill?

There are a million reasons why days on market might accumulate that have little to do with the desirability of the home.

Another tactic to use is ask for help with the closing costs but be prepared to pay a bit more for the property. This way the seller is not dinged on the price nor taking the money out of her pocket. Of course, the buyer is financing that additional amount on top of the sales price. Which means the home needs to appraise for that amount. Generally, though, the appraisals are right on the value we need.

This means if you’re offering a seller $375,000 for a home, you would offer instead $386,500 and ask for a credit of $11,500.

If you’re hoping to buy a home in Sacramento but think you don’t have enough money, call the Elizabeth Weintraub Team. We will match you with a top notch exclusive buyer’s agent on the team, an agent with plenty of experience to help you win the home of your dreams! Call 916.233.6759. Don’t put it off another day. We can help.