With home sales slowing just a smidge, sellers can make their properties stand out against the crowd.  One way is to offer to pay part or all of the closing costs. But there are additional avenues where sellers can take the bite out of buyer’s costs, says First Financial’s Janna Kohl.  Most lenders will allow sellers to pay only the buyer’s actual non-recurring costs.  These are costs paid on a one-time-only basis at closing and can include the following:  title insurance, points/loan origination fees, interest rate buy-downs, credit report, recording/notary fees, escrow fee, tax service fee, appraisal fee, termite and other inspection fees, endorsements, sub escrow, processing fee, underwriting fee, document preparation, flood certification, and administration fee.

The seller can never pay more than the buyer’s actual closing costs.  Cash back to the buyer is not allowed.  Some lenders will allow the seller to pay recurring closing costs, which may include property taxes, HOA fees, etc. but these are the exception to the rule and are on a case by case basis.

When in doubt remember, the seller can pay any or all of the buyer’s actual non-recurring costs but there is a limit to the dollar amount.  The breakdown is as follows:  up to 3% if the CLTV* > 90%, up to 6% if the CLTV* is 75.01 -90%, and up to 9% if the CLTV* is 75% or less.  Also, note that this applies to owner occupied properties only.  The maximum seller contribution for non-owner occupied properties is 3% of the sales or appraised value, regardless of the CLTV.

So sellers, has your property been sitting a while and have you’ve reduced?  Get creative with how to lure the right buyer to  your property.  In this changing market, creativity is key as well as sound advice from your trusty realtor.  Knudge, knudge, wink, wink, if ya know what I mean.