The Settlement and Other Expenses Paragraph of TREC contracts contains a provision for the seller to pay a buyer’s closing costs. Paragraph 12A (1) (b) includes a blank for a number that caps the amount of buyer expenses the seller will pay. This amount would be in addition to any amounts the seller must pay as seller’s expenses.
Full Answer
What expenses are covered by the seller's contribution?
Instead, the seller's contribution would first cover the buyers’ prepaid items and then the buyers’ other expenses up to the amount listed for the seller's contribution. These expenses are defined in Paragraph 12A (2).
What happens if an expense is more than agreed?
Paragraph 12.B. If an expense is more than was agreed, a party can split and run unless the other party is willing to pay the difference. I’ve never run into this.
What are the inherent seller expenses in paragraph 12A?
Paragraph 12.A.1. There are not a lot of inherent seller expenses, adding up to maybe a few hundred dollars in most transactions I’ve been a part of. Those expenses are specified in this part of the paragraph. The title company looks at this and knows who to charge for what on the final documents.
What are “buyer’s expenses”?
Paragraph 12A (2) defines “Buyer’s Expenses.” I represent buyers who are interested in purchasing a home and want to ask the seller to pay for part of their closing costs. They intend to use conventional financing instead of FHA financing, so there will be no FHA-prohibited fees.
What is 12.A.2 in a mortgage?
Paragraph 12.A.2. These are the buyer’s expenses, many of which are the same expenses that they can negotiate the seller to pay in Paragraph 12.A.1 above. Usually, the buyer’s expenses are far greater than the seller’s expenses above. Again, a lender can recommend what number to use here.
When are taxes paid in a lump sum?
Paragraph 13. Taxes are paid in a lump sum once a year (in October). What if you could sell your property September 30th, have someone else pay the taxes, and then buy it back right after, right? You’d save $1000s! (See Killeen, Harker Heights and Copperas Cove tax information here ).
What company to rely on to estimate closing costs?
It’s weird and math-y and confusing, and again, it is best to rely heavily on a quality lender or title company to estimate your closing costs depending on your closing date.
When do you pay taxes on a home you bought in September?
As I mentioned, the OWNER pays taxes in October for the entire year, January 1st to December 31st. If you buy a home in September, you are about to get taxed for the whole year, including 9 months you didn’t even own it. Except the seller will pay you the prorated tax amount at closing for the months they owned it.
Who is the best point of contact to estimate closing costs?
Your lender is the best point of contact to estimate closing costs; or title company if it is a cash deal.
Can a buyer ask for the seller to pay a lot?
While there are not a lot of inherent seller expenses, the buyer can ask for the seller to pay a lot. In fact, it is common in the Fort Hood area for buyers to ask for just about everything – all their closing costs, the owner’s title policy, a new survey, and first year of a home warranty. What was a few $100s might now be $3000-$8000+.
