When there are a lot of homes for sale and it takes a long time to sell
them, that's a buyers market. In most of the country, that's the current
situation. If it is a buyers market where you live and you're looking to buy
a home, you are in a strong position to negotiate for lower prices and
incentives. The guidelines for buyers incentives do vary from loan
program to loan program, so make sure to get pre-qualified first so
you can ask your loan officer about the allowable incentives for
your loan program and down payment. If you are putting from nothing
down up to ten percent down, you can ask for up to six percent of
the purchase price of the home to be paid by the seller for closing
costs, this six percent in most cases takes care of all your closing
costs. Nothing guarantees you will get everything you ask for, but
sellers are generally willing to negotiate and give you something.
The next thing you should do is make an offer and ask for those
incentive funds to be applied toward your recurring and
non-recurring closing costs. By applying the incentives toward your
closing costs, you lower the amount of out-of-pocket cash you need
to close the deal. Otherwise, you would have to come up with a down
payment and the closing costs. There are two types of closing costs
non-recurring costs and recurring costs. Non-recurring costs are
things like points and fees that you only pay once and never pay
again. Recurring costs are things like home insurance, property
taxes and HOA fees that you continue paying over the time you own
the home.
