A "seller assist" is a feature of many loan programs that is used to help a buyer pay for a portion of their closing costs.A seller assist is a great feature that allows the seller to pay some of your closing costs. In a market where sellers find it difficult to sell their home, many are willing to sell for less than the original listing price. Buyers should never be afraid to negotiate a lower price. By asking a seller to provide a seller assist, you can effectively lower the overall amount you incur in closing costs.
In most cases, a simple example can help overcome a seller's fears about paying for a buyer's closing costs. Lay it out in simple terms: if they agree on a sales price of $100,000, and the buyer's closing costs are going to be $3,000, the buyer can tell the seller that they will bump the offer up to $103,000, with the seller paying $3,000 in closing costs. The net effect is the same to the seller, and it essentially finances the closing costs into the loan for the buyer. Just make sure the property has enough value to justify the higher sales price.
A "seller assist", or the seller paying an amount toward your closing costs, must be written into the original offer/contract. Few lenders will allow that to be written in later, unless the selling price is remaining the same and the seller is simply paying toward your closing costs out of that amount. If you need the seller to assist with closing costs, be sure your real estate agent knows from the beginning.
Another form of seller assist is a seller paid buy down. This is where the seller assists the buyer with a cash concession that is used to buy down your interest rate. This is useful for many first time home buyers because the lower rate helps reduce their monthly mortgage payment and may allow them to qualify for a more expensive home.
In our current economy with housing markets slowing down, one could see home prices falling. A great incentive to sellers as well as buyers is having these seller's incentives in place. This allows for home prices to remain steady which helps everyone over the long term.
Usually with a "seller assist" each lender and programs has it's own specific guidelines as to how much assistance from the seller the lender will allow. For example one lender may allow the seller to contribute 3% towards your closing costs, while another lender may allow 6% to be contributed from the seller. Consult your mortgage professional for specifics details for your situation.
