Attention Overland Park 1st Time Home Buyers: Think You Can’t Buy a House? Think Again!
If you are just starting your home search in Overland Park, Olathe or surrounding areas, did you know that you can ask the home seller to pay your closing costs? What? In certain price ranges, it’s fairly normal for the seller to help the buyer purchase the home by paying their closing costs and prepaid items which typically run between $4,000-$5,000.
How does that work?
The minimum amount you need as an Overland Park home buyer is 3.5% of the purchase price – depending on your type of loan. You can ask the seller to give you a credit at closing for $4,000-$5,000 so you can pay your closing costs. So on a $200,000 house, you would need to have $7,000 down and you could ask the seller to pay the rest of the monies necessary for you to close.
What do sellers think about that arrangement?
That depends. It typically helps if the seller is aware upfront that it is not unusual for the buyer to ask the seller to help pay their closing costs. Does that mean the seller can ask more for the house? Unfortunately closing costs don’t play into the value of the house. The house still has to appraise for the purchase price.
In other words, if you’re a smart buyer, it would make sense for you to offer full asking price for the house and then ask them to pay your closing costs. Sellers can go along with the idea or not. But since most 1st time buyers don’t have their down payment and closing costs, it’s a way for the seller to sell and for you to buy without having to save up another $4,000-$5,000. That opens up the market to more buyers being able to buy a house. In turn, it pays off for the seller as well.
Are you a buyer thinking you still need to have 20% down before you can buy a house? That’s an old myth that refuses to go away. If you are a home buyer in Overland Park, it’s encouraging to know that yes you can get into a house for the 3.5% down payment and get out of the trap of continuing to pay your landlord’s mortgage.
If you’re a first time buyer you can learn more about the home buying process at my next Buying Your 1st Home May Be Easier than You Think Workshop on Tuesday, September 23rd. You may be surprised about how much you didn’t know regarding the home buying process.
Questions? Call me direct at (913) 515-3250 or get started buying here.