Month: September 2021

Today’s buyers can be easily excited at the sound of paying no closing cost or no down payment.   And with closing cost edging 2-4% of a purchase price it shouldn’t come as a surprise that no buyer wants to pay unless they have to.  When it comes to paying it isn’t a matter of whether there is closing cost.  A more important question is who is paying?  

The responsibility typically falls on one of four parties:  Buyer, seller, bank, or gift.  

Will the buyer pay?  A bulk of the closing cost (2-4%) is the responsibility of the buyer.  Did you know that buyers who pay their own closing cost have a higher chance of winning in a multiple offer situation?  

Will the seller pay?  Sellers seldom offer to pay closing cost unless doing so lead to getting more offers or higher sale prices.  If the seller pays will the increase in purchase price increase the risk that a property will not appraise?  Likewise, in a buyer’s market not offering to pay closing cost can lead to selling at a discount or no offer.    

Will the bank pay?  In 2021 Wells Fargo Bank has been known to pay upto $5000 of a buyer’s closing cost with no strings attached.   

If the bank pays, will the buyer pay back in the form of a higher interest rate or loan fee?

If the buyer pays, will the buyer have sufficent amount for down payment to qualify for a loan?

If it is a gift, will the funds be properly documented?   

No matter who pays the closing cost the money will need to come from somewhere.  AND–In many situations the closing cost can mean a difference between closing a deal, walking away, or losing out to a better offer.

Updated:  September 9, 2021

In a hot market sellers with multiple offers often assume that the offers received must be the best and highest.  In a slow market the same seller might assume that a home without offers is one caused by a laggard or unperforming real estate agent.

While both of the scenarios above may have held some truth 10 or 20 years ago when buyers were spread over town and market exposure was fragmented by newspapers, MLSes, magazines, home publications, flyers, open houses, and neighborhood word-of-mouth the fact to the matter is it is no longer the way buyers search for homes in our current “always-on” world.  Today — it no longer requires buyers to spend hours to drive around town to compare properties — it takes just a few minutes to pull up all the properties for sale on a smartphone or home computer.  Extraordinary efforts are no longer necessary to locate and find buyers because all the buyers are locked and glued to their smartphone awaiting the newest listed properties.  While each buyer might start their journey differently all will end by comparing properties on their mobile or computer screen. 

Current transformational shift in how buyers search for properties has become a key driving force behind the success of scientific home selling.  No longer will it be necessary to hunt down buyers, today’s sellers simply need to quickly identify the needs and wants of buyers in a non-intrusive way that will generate the best and highest offers.  To receive the best and highest offers sellers must be able to generate the best and highest quality buyers in the quickest possible time. 

In the absense of a system to generate and compare high quality buyers, offers can be best compared to your email spam.  With the recent onslaught of businesses and investors beating down doors with cash offers on properties, the savvy consumer will be one who understands the benefits from comparing in real-time.