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
Broker License # 169695 Lane Realty License # H-11420
Call me today for all your Lake Sinclair real estate needs.
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