My recent columns have been devoted to the notion that there are a lot of buyers and sellers out there making….uh…..some really dumb decisions.  The reasons for those decisions would be laughable were they not so impactful.  Buyers today always think they’re paying too much (their Uncle Charlie told them) and the sellers are accepting too little (THEIR Uncle Charlie told them).  As a result, the normal minor hurdles that always come up get blown into become major issues.  The buyer loses the house he really wants, and the seller stays in the house when he really wants to move.  Often, the cost to the parties to jump their hurdle is less than the money they’ve already spent (appraisals and inspections, e .g.), and now they’ll have to spend it again to get through the next contract!  Que lastima.  What a shame.

    Today’s most common example sees some contracts fall out before they’re ever accepted because the buyer asks the seller to pay some of his loan and/or closing costs.  The seller feels offended by the buyer’s “low”offer, and can’t possibly accept the notion that he should help the buyer.

    In today’s market, if you’re not prepared to help the buyer with his closing costs, you may not be able to sell your house.  With three quarters of sales at the $250,000 level or lower, most buyers get government loans.  They’re either Veteran’s Administration Guaranteed (VA) or FHA insured, because those loans require very little or no cash down payment.  But they do require cash for loan costs. 

    Say your house is listed for  $250,000. You get an offer for $235,000, and the buyer asks that you pay $5,000 in loan costs, a “seller contribution.”.  As you’re preparing your counter proposal, your FIRST objective should be to see if you can pay the buyer’s loan costs.  Whether you counter at $245,000 and pay $5,000 of the buyers costs or accept $240,000 but refuse to contribute, your return will be about the same - $240,000.  The difference is that without your contribution your buyer may not be able to close, and without a closing your house isn’t sold…..que lastima.

    Dear readers, these are challenging real estate days for everyone.  Buyers, sellers, brokers, lenders, inspectors, title companies and even (especially) Uncle Charlie ….everyone involved in the transaction should resist the notion that this is a competition.  To best succeed, a real estate transaction must be a cooperative effort among all those parties to try to help buyers and sellers reach their goals.