If the only thing preventing you from selling your home is the out-of-pocket cost of the buyer's closing fees, and you can pay it, it would be beneficial for you to do so. You should recoup that money by raising the price of your home by the same amount. You see, buyers might not be able to come up with extra cash for closing costs, but they can often borrow more money with their loan. Many buyers don’t realize that if you pay their closing costs, you’re giving up some substantial profit on your home’s sale. You should help them realize that fact in your counteroffer. Here’s how you handle the situation. When the buyer submits an offer that includes you paying the closing costs, simply counter with an offer that says you’ll do that. That is, you’ll pay their closing costs, let's say $3,000, as long as they agree to the higher price you’re proposing for your home, an additional $3,000 for the price of the home. This approach maintains your net profit because you'll get back the money you agree to pay for their closing costs at the same time the buyer wire the funds, through a title company, to your bank account. It's a wash.
There's One Caveat - the Appraisal
The bank's appraisal is one thing that could throw a wrench into this transaction. In the event your home doesn't appraise for the amount of money you’re asking, you’ll have to take a step back and further strategize. In the event, a great agent can help you think through what to do next if your home doesn't appraise for the negotiated price. But at least you'll know what a lender believes your property is worth . . . because a bank isn’t going to lend more money than the appraised value of your home.
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