Lynn B. Friedman - Atlanta Homes ODAT Realty: Closing costs in Georgia... what can the seller pay?

Closing costs in Georgia... what can the seller pay?


Dear Readers -

In this post, Tammy Lankford, from the Milledgeville, GA area - AR's own Lake Sinclair expert, explains   about Seller Contributions. Tammy explains that in her area of Georgia, Seller contributions are not a common occurrence (or at least weren't when post was written).

In Metro Atlanta, however, Seller Contributions are OFTEN a negotiating factor.

Tammy shares important information in her posts all the time. I am grateful for all the interesting things I have learned from her over the years. 


 Have a successful day -

PS -- If I haven't thanked you personally for following my writings, please accept my gratitude now. Your views and comments mean a lot to me.  L.


Two years ago the GAR contracts that we use in my office got a remodel.  After the initial shock of "oh no another drastic change" my agents love the simplicity of filling the offer out these days.  All of the information needed is right on the first page with the exceptions of buyer and seller names, special stipulations and list of attached documents and contingencies.

Today I want to focus on closing costs.  In Georgia buyers pay closing costs with the exception of the two items I'm about to address.

Right on the front page there is a line item that must be filled in about closing costs:

This item is the seller's contribution.  It cannot say 50% or half which we get lots of buyers saying they want the seller to pay.  It must be a dollar amount.  Yet another great reason to talk with a lender prior to home shopping to know two things: 1. What your expected closings costs might be and 2. What amount will a seller be allowed to pay.

That's right the lender actually controls the amount a seller can contribute towards closing costs. Different loans have different amounts and it can vary from 3% of the loan amount maximum to 6% of the sales price maximum depending upon what type of loan you are getting.

The page two explaination about closing costs and prorations is as follows:

You can see from the explanation that if the seller agrees to pay $3,000 in closing costs, but it's "not allowed" by the lender then the overage will go to the seller at the closing table even though it's not the stated amount.  So it's best to know when asking for the seller to contribute to your closing costs to already know what amount the lender will allow.

It's not very common to my market to have sellers paying any of the buyer's closing costs.  It does happen on rare occassions, but in the end sellers always factor what they are "giving back" to buyers in their bottom line.  So really if sellers are "paying" some of buyers closings costs buyers are really just paying that much more for the house and financing closing costs into the home for up to 30 years.


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Tammy Lankford, Broker/Owner


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Comment balloon 2 commentsLynn B. Friedman • April 15 2016 09:48AM


Thanks for the kind words and re-blog Lynn.  Still on second homes it's not very common here.  When buyers are paying 20% down they usually have funds for their own closing costs.  

The exception of a full time buyer using a VA loan that pays some things a veteran is not allowed to pay (termite letters, well tests) or the occassional off water first time buyers we have in our office where funds are tight and they need the help getting into the home. 

But in the end, the buyer and buyers' lender bring all the funds and the seller only gives some funds back to the buyers after first getting them from the buyer so it's really just buyers financing their closing costs.  Which again if they are short of funds is needed sometimes, but if you have the funds, it's just not a good idea to finance closing costs.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) about 3 years ago

This is a good post to reblog. I hope home buyers in the area will read it.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 3 years ago