No Closing Costs
Getting no closing costs is always one of the hopes when a buyer or seller is negotiating the sale of a home. In the end it really comes down to getting the best overall deal possible. So use the closing costs as a negotiating tool to confuse the numbers into your favor.
As the Seller
If you are the seller you biggest challenge is not nickel and diming a potential buyer out of purchasing your new home. One of the best ways to make them feel better is to reduce the size of the check they need to sign to just walk in your home. If you are offering your home at or slightly below the current market home value you can raise the price of your home by 10% over the cost of closing. Then just simply offer to pay the closing costs for the potential buyer. You will actually make more money of the transaction and they will run off and tell their friends about the steal they got on their new home. Everybody wins.
As the Buyer
If you’re the buyer your best hope of no closing costs is in the negotiations of the price. You never need to mention that the reason you are lowering the price is to cover the closing costs. The seller does not care that you have bills to pay. The seller wants to get what he’s asking for the house because he feels it is worth that much. Go through the house with an inspector or your real estate agent and nit-pick little details. The seller often does not want to hear about every bad thing in his house and will budge 1 or 2% just to not have to see the list of things he needs to fix before closing. Obviously these details didn’t matter to you, but your closing costs are now covered (plus the interest you would have paid over 30 years.)
If you’re really cash tight the best place to start to get to no closing costs is by negotiating with the services charging you. Shop around with different mortgage brokers to find the lowest loan origination fees. You may pay a little more in interest, but you don’t need to write as big of a check up front.
Once you get your fees as low as you can get them then you try to get the seller to pay for them. If the seller will not budge on giving you no closing costs you can ask them to raise the price about a portion of the closing costs and split the costs. This a good alternative where the seller doesn’t want to lose the deal over a few hundred dollars and you can finance your closing costs. Often $1000 will only cost you $5 per month over a 30 year loan. You won’t hardly notice the difference and you won’t have to deny yourself the house you wanted while you saved the difference.
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