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Buying a House

Z

ZoomZoom Diva

New Member
I can understand seller paid closing costs, but I have never understood the concept of a seller paying a down payment in lieu of a lower price.
 
Workdawg

Workdawg

NARWHAL
I understand that it's not the greatest financial decision, essentially financing the DP, but it's only a couple thousand and it'd make things easier for us as we don't have a ton of cash sitting around and will need to be buying furniture and such things.

Also, it's an easy way to try and get a little more out of the deal. If they take that offer, great... if they don't it'd be easy for them to counter with having us cover some of the dp, which we could do if needed.
 
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Z

ZoomZoom Diva

New Member
It's really a zero sum game in terms of amount borrowed and such, it just gives some phantom equity in terms of the appearance of agreement (real equity is based on loan to appraised value, while a down payment is the appearance of said equity). You take $170,000 and $5K down or $165,000, and the loan amount (and equity) are the same. However, lenders seem to think the former case appears better. Financially, it's a wash.

I guess looking at it that way, and buying without a substantial cash position, where it can conserve your liquid capital.
 
Workdawg

Workdawg

NARWHAL
Oh yeah... I understand that. The seller cares about the bottom line. If we were to offer 175 and they pay close/dp of 10k total, it's the same thing as just offering 165.

Just makes things a bit easier for us.
 
dmention7

dmention7

Hater
If you have the cash laying around for a DP, then yeah it makes no sense to do it that way. But we were in the same boat as you Dan... needed to get out of the apt, but just couldn't comfortably put up several grand in cash. In some markets it would probably be most advisable to hold off until you do have that cash on hand. But right now IMO circumstances are such that the good of getting into a house outweigh the relative disadvantages of paying little to nothing out of pocket.
 
D

DrWebster

Guest
Did you look at an FHA loan? They allow for smaller (and sometimes no) down payment, and often have a first-year buydown on the interest rate.
 
Jana

Jana

New Member
DrWebster said:
Did you look at an FHA loan? They allow for smaller (and sometimes no) down payment, and often have a first-year buydown on the interest rate.
Click to expand...
I believe they have nixed the zero down with the way the market is currently. Things have drastically changed since I even purchased last Fall.

Good luck Dan!!
 
W

WhiteSpy9

Guest
We did FHA and were required to do 3% down. edit** for the best interest rate that is...
 
M

mazdamn02

Guest
We did FHA and it required 3% cash down. Good interest rate though.
 
D

DrWebster

Guest
Yeah, we did FHA too, I can't remember what it required. We put around 3% down as well.
 
Workdawg

Workdawg

NARWHAL
Another update:

After going back and forth a couples times, the seller accepted our offer! The final price ended up to be right in between our original offer and the asking price, which is about what I expected.
 
Workdawg

Workdawg

NARWHAL
Haha... we'll have people over eventually I'm sure. Not closing until almost the end of september. I'll have to setup a "move our shit and get food and beer" meet. It took about 6 hours to get Jenny out of her apartment doing all the moving myself while she cleaned/packed. Now that it's all packed up, it's just a matter of putting stuff in the truck and then unloading it. I have to pack my shit up, but I have plenty of time for that.
 
Jenny

Jenny

New Member
Dan it took us 8 hours and that was just half of my stuff i moved the other half in april. put nice try.
 
M

mazdamn02

Guest
Congratulations, I will be there for said move boxes and drink beer eat food event.
 
Workdawg

Workdawg

NARWHAL
Bump for update:

The inspection was on Monday and the inspector said everything looked great. I was there while he was doing the inspection and he seemed to do a pretty thorough job. We also asked the seller to move up the closing date, which also happened. We are now set to close the beginning of Sept instead of the end. I also got an email from our loan officer, she's received underwriting approval for the loan. We just have to provide further documentation of a few things and then sit down and lock in an interest rate.

Things are moving right along!
 
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