Buying Sugar Land Real Estate: Asking the Seller to Help with Closing Costs
One of the more popular home mortgage loans used for buying Sugar Land real estate is the FHA 203b program. You can use this type loan to buy new or existing one to four bedroom homes in Sugar Land as well as condos and townhomes. You choose the duration – 15 or 30 years. The 15 year loan is more per month but you end up saving a ton of money in interest vs. the 30 year loan which has a smaller monthly note. As with everything, there are pluses and minuses to the FHA loan. Down payments can be as low as 3.5% but you must have a credit score of 640 or better. You must also have sufficient income and work history (usually 2 years on the job). One of the tactics we often suggest is asking the seller to contribute to the Sugar Land home buyer’s closing costs – usually around 3% of the sales price. In a competitive market where the inventory is 6 months or less, there are some restrictive forces in play that need to be considered. A chief concern is whether the offer price should be increased to cover the Seller’s contribution. If you would normally offer $200,000 for a property but are asking the seller to pay $6,000 of your closing costs, the offer should go in at around $206,000 to account for the money being paid on your account. Will it appraise? That’s the big question. If you bump the sales price up so you can get the Seller’s contribution on your closing costs, are you pricing the home so high that it won’t appraise? We’ve seen this happen, especially when the market is trending downward due to seasonal slow periods (late fall to early spring) or when there are foreclosures and short sales that the appraiser must consider. These two major factors can affect the ultimate sales price of Sugar Land real estate and may have a considerable impact on what the seller can afford to contribute. Your Realtor will monitor the market with as much information as is available through the MLS (Multiple Listing System) and help guide you in your negotiations, bou may have to tweak your offer to fit the circumstances.
Prime Properties is a Sugar Land area residential and commercial real estate brokerage firm serving Fort Bend County and Southwest Houston. It is headed by Broker, Mike Harness and veteran Sugar Land area Realtors, Sherry Miles and Stephanie Nelson. For more information on Prime Properties, visit http://primepropertiestx.com/contact-prime-properties/ for contact form, phone and email information.