Asking a seller to pay your closing costs on a house purchase in Northern Virginia is common, but it’s often a misunderstood part of the home buying process. A buyer’s closing costs in Virginia usually amount to about 2 – 3% of the purchase price of the property, which, needless to say, can seem daunting to many buyers who are already struggling to put aside money for their down payments.
Seller Subsidies Toward Closing Costs on a House Purchase
In Virginia, unlike some other states, sellers and buyers each pay their own closing costs. For instance, in California, sellers and buyers split closing costs.
If you ask for a seller to pay for your closing costs on a house purchase, the thing to remember is that this subsidy isn’t just free money – it comes directly from the seller’s proceeds on the sale. So, you take the amount of money their making on the sale, and subtract the amount of the subsidy from that number, which equals the seller's net proceeds.
Long story short, a seller subsidy is the same thing as offering a lower sales price on the home. So, if you make an offer of $400,000 with a $12,000 subsidy toward your closing costs, that’s the same as offering a sales price of $388,000. The net amount to the seller is the same.
Read Part 2 of my blog series on asking a seller to pay for closing costs on a house purchase.
Are you looking for more home buying strategies for the Northern Virginia real estate market? Email me at DarrenRobertsonHomes@gmail.com for a list of the top five strategies to use when making an offer.