How to Negotiate Closing Costs

Are you considering buying a condo, vacation home, or other property in Panama City Beach? One of the best ways to maximize your investment in real estate is to negotiate closing costs. My minimizing your upfront out-of-pocket cost, you will have more cash left to renovate or furnish the property, or simply to keep on hand for your next investment opportunity.

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If you are new to negotiating closing costs, check out these tips.

Know which Costs are Negotiable

Not all closing costs are negotiable, but knowing which are will help you make the most of your investment. The expense of some closing costs will be negotiable with the lender, while other costs are negotiable because you can ask for seller concessions to cover the expense.

Non-negotiable costs include:

Negotiable costs include:

You may also be able to negotiate your bottom line by making a contingent offer. For example, an offer with a home inspection contingency might mean that the home inspection report can allow you to request that the seller cover the repair or replacement of something in the home, either in the form of a credit at closing or by paying for the repair or replacement before closing.

Understand the Seller’s Position

While there is no way to be entirely sure of the financial position of the seller, understanding the real estate market in Panama City Beach and the national market will help you make some educated guesses about how flexible the seller may be. In today’s market, the average American homeowner has record high home equity that allows them to be flexible in negotiations with buyers.

Your seller is likely able to accept the purchase price they are hoping for while having additional equity in the property from which they can fund some of your closing costs. In some markets, we can’t recommend asking for this as you are likely to lose out to other buyers, but today it may be the perfect market conditions.

Be Prepared for Negotiations

Before negotiating with either the seller or the lender, be fully prepared with all the information you need. This includes:

Ask Your Lender about Your Options

We recommend working with more than one lender to compare the terms of the loan documents, in order to make sure you are getting the best deal. After getting all the information from your potential lenders, ask each loan officer about your options for closing costs. You may be able to negotiate the costs themselves, or have some or all of the costs rolled into your mortgage.

Feel free to let each lender know that you are talking with a competitor. This often motivates them to offer their best deal, which is likely to work in your favor.

To learn more about Panama City Beach real estate, contact us any time.