When Do Sellers Pay Nonrecurring Closing Costs?
Sellers might be willing to negotiate a credit to pay nonrecurring closing costs in a buyer’s market, if sellers have had trouble making a deal or want to ensure the deal goes through. As a buyer, if the seller hasn’t offered to negotiate a credit for nonrecurring closing costs, it might still be acceptable for you to ask for this in negotiation. The only time you might want to avoid asking for an escrow credit for nonrecurring closing costs is in a multiple-offer situation, or if you’re buying in a seller’s market. Price Reductions versus Credits One common question about escrow credits is price reductions versus credits: why a credit, and when is a price reduction appropriate? Price reductions generally aren’t helpful if buyers are strapped for cash. For example, if buyers have $50,000 to put down on a $250,000 home, that puts them at 20% down and reduces loan costs and insurance fees. However, if buyers also have to pay $10,000 in closing costs, that effectively puts them at $40,000
