Five Ways to Get a Seller to Cover Your Closing Costs When Buying a Home

| Updated on March 1, 2024

Buying a home for the first time is a huge undertaking that can be financially and emotionally draining. The process of buying a house usually involves a long timeline from your initial search to closing day. It is also often accompanied by a staggering amount of credit card debt, thanks to surprise fees or emergency cash infusions. But there are ways to reduce your financial burden by negotiating more favorable terms. So, what options can you use to alleviate some of your closing costs, or at least put the responsibility on someone else? Here are five:

1. Offer to Pay Cash

If you’re able to make a cash offer, you’ll have more leverage for negotiating closing costs since your seller will have their payment in full much faster than if you used a mortgage.

However, making a cash offer is difficult for many who don’t have enough savings to cover a major purchase like a house, so don’t feel bad if this seems impossible for your financial situation. Remember that if you don’t have the cash to use as leverage and require a mortgage, that doesn’t mean you’ll be stuck with this mortgage debt forever. You can use a loan payoff calculator to adjust your finances so that your mortgage gets paid off faster, allowing you to put that money towards savings. Then, should you want to move, you’ll have more cash available for the next purchase to swing the negotiations more in your favor. 

2. Send Your Offer During a Buyer’s Market

There are two types of market conditions in real estate: a Buyer’s Market and a Seller’s Market.

Seller’s markets happen when there’s more demand than supply, and potential buyers have fewer options for which houses are listed for sale. Buyer’s markets are the opposite, where there’s more inventory than demand, so the extra supply of homes gives buyers more power to negotiate. 

If you can wait for the market to swing back to favoring buyers, you’ll have a better chance to make requests such as having the seller cover your closing costs so they get their home sold quickly.

3. Negotiate During Due Diligence

Due diligence is the time allotted when a house is put under contract. The buyer has an opportunity to have the property inspected and have the title researched to ensure there aren’t any positions being held or any liens.

Should you or your Inspector find issues, you can negotiate with the seller to either reduce the purchase price or pay your closing costs to cover the expense of having these issues fixed. The same goes for any problems found with the title, though any liens or first positions left on the title should make you seriously reconsider moving forward with your offer. 

4. Don’t Make Too Many Contingencies

The easier you make it to close, the more the seller will be open to your requests. Any contingencies such as needing your previous house to sell first or that the seller fixes any issues with the home before closing could make them less willing to be flexible when deciding who pays what. 

5. Ask Them to Pay a Portion Instead of All Closing Costs

Your closing costs won’t be just one fee; you’ll have a few expenses that need to be paid to transfer ownership of the property. Everyone’s costs vary, but typically, you can expect to pay real estate agent commissions, taxes, wire transfer fees, and title insurance. If your seller is unwilling to cover all costs, try negotiating to have them cover half the fees or one major expense such as the commissions. 

The Bottom Line

These are a few ways to get a seller to pay for your closing costs when buying a home. These tips should help you achieve your goal of reducing your financial burden while still successfully closing on your new home. ,

John M. Flood

John is a crypto enthusiast, Fintech writer, and stock trader. His writings provide guides to perform your best in the crypto world and stock planet. He is a B-Tech graduate from Stanford University and also holds a certification in creative writing. John also has 5 years of experience in exploring and understanding better about the FinTech industry. Over time, he gained experience and expertise by implementing his customized strategies to play in the crypto market.

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