Chat about Macomb County MI real estate & Homes for sale search site

Macomb County MI Real estate

Macomb County MI real estate blog

Purchasing a home that is a short sale – will the seller & the mortgage holder pay for closing costs?

June 28th, 2010 · No Comments · fha mortgages and first time home buyers, short sale advice in Macomb County MI, tips for home buyers

If you have been looking for a home over the last year or so you have encountered homes offered for sale with a “short sale” contingency.   There’s no avoiding them, they make up so much of a percentage of the homes for sale now in Macomb County as well as the entire state of Michigan.

As a buyers agent I discuss with my clients the pros and cons of making an offer to purchase on a home that is subject to a short sale.  We go over the time line that is normal, the process the seller has to go through in order to obtain an approval, and the pitfalls that can happen during the purchase process.

One area that keeps cropping up and can be confusing is this: Will the mortgage holder agree to paying for some (if not all) of the buyers closing costs?

The answer: It depends.    It depends on the mortgage holder, the type of mortgage the seller has, and the other various investors who have a say in the process (the PMI company, the end investor – Fannie Mae or Freddie Mac, etc.)

One common scenario is in which the seller has an FHA mortgage and the prospective buyer is also using an FHA mortgage for their financing.  In the short sale scenario FHA does not allow the seller to give more than 1% of the purchase price in sellers concessions to the buyer, even though FHA allows up to 6% of the purchase price to be paid by the sellers in a non-short sale purchase.

Please talk to your lender and your buyers agent before making an offer on a short sale purchase.  The type of financing you are using, as well as the type of mortgage the seller currently has can make a big difference in what is allowed & disallowed as far as the sellers helping you with your closing costs.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
Search homes for sale with MLS provided data

Tags: ·

0 responses so far ↓

  • There are no comments yet...Kick things off by filling out the form below.

Leave a Comment

Important copyright information: All photos were taken by Kris Wales. Do not copy and use photos for your own use, whether it be for personal or commercial purpose. All articles were written by Kris Wales. Once again, do not copy and use for your own purposes. Important disclaimer: Views expressed on the blog by the author and commenters do not express the views of Keller Williams Realty. All information contained is deemed to be reliable at the time of posting but not guaranteed.