How to document sellers paying for closing costs
12/02/2016 | Author: Legal Staff
I represent buyers who are interested in purchasing a home and want to ask the seller to pay for part of their closing costs. They intend to use conventional financing instead of FHA financing, so there will be no FHA-prohibited fees. How do I handle this in the buyers’ offer?
An amount for a seller’s contribution to the buyers’ closing costs should be in Paragraph 12A(1)(b) of the contract. If the buyers were using a government loan program, such as FHA financing, for the purchase, this contribution would first cover expenses related to the program, but this does not apply in this situation. Instead, the seller's contribution would first cover the buyers’ prepaid items and then the buyers’ other expenses up to the amount listed for the seller's contribution. These expenses are defined in Paragraph 12A(2).
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