Posted by Robert E on July 11, 2002 at 16:22:30:
Correction…bottome line is it’s your call as the seller.
closing costs - Posted by Eric W. (WA)
Posted by Eric W. (WA) on July 11, 2002 at 15:46:15:
If I take over a property subject to, and I hold the deed, when I sell the property - say 1-2 years later - who pays the closing costs? Me or the original home owner?
I assume that it is me since I hold beneficial interest in the property and only the financing is in the previous owners name. But, how do you figure this into your profit calculations when determining your exit strategy and the viablity of the investment?
Anyone?
Eric
Re: closing costs - Posted by ThomasG
Posted by ThomasG on July 11, 2002 at 18:06:05:
you could have the lender pay it. They will just bump up the rate about 5/8 or so to cover the cost.
Re: closing costs - Posted by Robert E
Posted by Robert E on July 11, 2002 at 16:19:21:
Eric - I have found that closing costs are a function of 1) the market and 2) negotiations with the buyer; particularly when it comes to the buyer obtaining conventional financing…closing costs can be 3-4% of the sales price. When doing a financial analysis, I always lean to the conservative side and assume I will pay closing costs simply because its currently common in my market. That does not mean I will not adjust the sales price to cover the costs or negotiate otherwise with the buyer. Upside is, most conventional lenders will absorb the closing costs for the buyer in exchange for a slightly higher rate or roll the costs into the mortgage amount. Helps knowing that the buyer does not have to pay cash out of pocket if you are insisting that the buyer pay closing. I have often seen situations where seller and buyer split the costs or the seller pays closing up to a certain amount. Bottom line…it’s your call as the buyer who pays closing costs or any portion thereof. Good luck!