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Response: Closing Costs Question?

“I want to buy a house that is 165,000, the taxes are 2,800, and my realtor says the closing costs are going to be 10,000 dollars, isn’t this pretty high? I want to ask the seller to pay but even if he does that still takes money out of my pocket because I can’t negotiate the price. I’m a first time home buyer, 6.25 rate and I am in New York.”

-Michael

 Response: Closing Costs Question?

What are Closing Costs?

I am assuming that your agent just gave you a ballpark figure of $10,000. It could be less, then his/her estimate.

Closing costs can be divided into three categories:

  • Lender fees (points, appraisal, credit report, underwriting, settlement and tax service fee)
  • Prepaid (interim interest, real estate taxes and escrow, insurance premiums and escrow)
  • Settlement costs (title insurance, settlement/attorney fees, city/county/state taxes, recordation and messenger fees)

I am sure your realtor is knowledgeable in his or her real estate market, but real estate agents aren’t trained to price out the total costs of closings. We may know what is included but the prices always vary. The $10,000 ballpark figure isn’t too far off.

It’s not uncommon to negotiate with the seller in order to have them cover the closing cost. The only problem is that most sellers will want to wait out your offer, mainly for another offer from someone else. They are really looking to wait for an offer in which they wouldn’t have to pay your closing costs. It becomes a sticking point, if you really want this home, you may be damaging your relationship with the homeowner, but negotiating. You could possibly lose out on this home.

Hope this helps

Good Luck Michael, If you need any more help feel free to Contact Us again

If you know anyone in my area of Staten Island, New York that is in need of a good real estate agent, feel free to have him or her contact us as well.

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1 comment to Response: Closing Costs Question?

  • Mike

    Walt,

    Thanks for posting my question on your site, I feel special lol. Just one more quick thing, I talked to my Agent and we were able to present an offer with the home owner accepting to pay for the closing costs.

    Thanks for your Help

    Mike

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