Question:
I have a situation where my father was going to gift me $8000 for closing costs. We are done with attorney review and now my dad is saying he can’t help me out.
Without the 8k I don’t have the money for closing. I have two solutions. First is my state has a prefund tax credit program where they will lend 5k in an interest free loan. The last 3k I can get from my father-in-law.
The second option, and this is where I need your guidance, is to go back to the sellers to see if they will increase the price by 8k and give me a 8k seller credit. Is this even possible? Is it something that happens often? Thanks. (Asked and Answered on Zillow)
Answer:
Yes, it happens quite often. There are a few challenges to understand as you choose this path.
1. You need to get the seller to agree. Adding $8000 to the price will not increase the seller’s proceeds, as you will be asking for that back towards your closing costs. However, it will increase the seller’s costs slightly, commissions, excise tax etc, (any applicable in NJ). (I’m in WA)
2. The house must appraise for the higher amount. If your appraisal is already done and isn’t high enough to accommodate the $8000, you might be best going your other route for the $8000 in this transaction. If you haven’t yet had your appraisal, get the negotiating done first with the seller then get your appraisal with the new price.
Keep your loan officer in the loop as your loan program may or may not allow seller contributions. Most do allow that.
Best of luck!
Lynette Hensley, from the ComeBuyAHouse.com team with Larry Baumgartner.
Tags:
closing costs,
Escrow,
first time,
homebuyer