findwell blog - Real estate trends

Take advantage of the new home buyer tax credit

kevin lisota — Mon, 09 Nov 2009 21:49:21 GMT

Last week, Congress and the President approved new legislation that extends the first-time home buyer tax credit and expands eligibility to existing homeowners. The legislation is known as the Worker, Homeownership and Business Assistance Act of 2009. The IRS has more details on the tax credit here.

If you plan on buying a new home between now and April 2010, you will definitely want to take advantage of the credit if you qualify. First-time home buyers can save up to $8,000 and existing homeowners may also qualify for a $6,500 credit to buy a new home.

How much is the tax credit?

The tax credit is 10% of the purchase price of the home, up to the following maximum limits:

First time home buyers = $8,000
Existing homeowners = $6,500

Who is eligible?

To be eligible, you must be buying the home to be your primary residence. You also have to live in the home for at least three years, otherwise you will be required to pay the credit back on future tax returns. The tax credit is limited to homes with a purchase price of $800,000 or less.

Eligible Buyers
- First-time home buyers who have not owned a primary residence at any time during the three years prior to the date of purchase.
- Existing homeowners who have lived in the same primary residence for any 5 consecutive years during the prior 8 years.

Income limitations

The new law increases income limits to qualify for these tax credits.

Credit phases out for Individual Taxpayers with modified adjusted gross income between $125,000 and $145,000
Credit phases out for Joint Taxpayers with modified adjusted gross income between $225,000 and $245,000

Deadlines

To take advantage of the tax credit, you must enter into a binding contract for purchase of your primary residence on or before April 30, 2010 and close the purchase by June 30, 2010. For purchases in 2010, taxpayers have the option to claim the credit on either their 2009 or 2010 tax return.

In order to meet these deadlines, it is important to allow yourself enough time to locate and negotiate the purchase of the home. Our typical home buyer takes between 1-2 months of home shopping to locate a home. Allowing time for you to shop and negotiate a purchase agreement, we recommend beginning your home search at some point in early February. You want to allow plenty of time to find the right home and also allow time in case there is competition for homes in your price range.

Northwest MLS releases Seattle real estate statistics for October 2009

kevin lisota — Fri, 06 Nov 2009 16:57:26 GMT

The Northwest MLS has released their Western Washington real estate statistics for October 2009. Despite seasonal trends that should have the market slowing down in the fall, the upcoming expiration of the first-time buyer tax credit is attributed for a stronger than normal sales pace. For Western Washington, pending sales versus October of last year are up 63% and inventory levels that are the lowest since December 2008. Year-over-year price declines continue to slow.

Pending sales of single family homes and condos in the four-county region of King, Kitsap, Pierce and Snohomish counties are up 70.4% over last October. Aside from the tax credit driving sales activity, remember that September-October 2008 was filled with horrible financial news such as the stock market crash and multiple large bank failures which contributed to the slowdown last fall.

King County Data for October 2009

King County median prices are down 2.4% from twelve months ago.
There were 2,234 closings in King County for single-family homes and condos, up 29.7% from a year ago.
Pending sales for King County are up 71% from the same time last year.
Average and median sale prices for homes and condos in King County remain relatively flat this year.

findwell’s business in the Seattle area was abnormally strong during October, with our best month of the year for sales. Normally we expect our best month of closings in August, due to normal seasonal trends, but clearly the tax credit deadline drove activity later into the fall. It will be interesting to see how the new extension and expansion of the home buyer tax credit will impact home sales activity over the next 6 months. Stay tuned to the findwell blog for future monthly updates.

Home buyer tax credit likely to be extended and expanded

kevin lisota — Thu, 05 Nov 2009 03:29:39 GMT

The US Senate approved a bill today that will extend and expand the first-time home buyer tax credit that is set to expire on November 30, 2009. Contrary to what some real estate agents are reporting, the extension has not been approved yet. It still needs approval from the House of Representatives and President Obama. Whether or not you agree with the credit, it does have strong bi-partisan support in Congress and is likely to be passed by the House as well. President Obama has also voiced support, so the passage of the new tax credit, while not a done deal, is extremely likely at this point.

The details of the tax credit, as passed by the Senate, include extending the credit for first-time home buyers until April 30, 2010. It also expands the credit by offering a $6,500 tax credit to existing home owners to purchase a new home, provided that they have lived in their home for 5 consecutive years in the previous 8 years. It also raises the income limits of the program to $125,000 for individuals and $225,000 for couples.

For home buyers worried about hitting the November 30 deadline, it looks like you will get a reprieve. For home buyers looking to purchase in the next few months, it appears that you may get an added benefit from Uncle Same. Stay tuned and I will post again when the law has been approved and the final details are available.

UPDATE (11/5/09, 11:00AM): The House of Representatives just passed the tax credit extension, so its approval is now simply waiting signature by President Obama.

UPDATE (11/7/09): President Obama signed this bill into law extending and expanding the home buyer tax credit. See this post for complete details.

Beware of the greedy dual agent

kevin lisota — Thu, 29 Oct 2009 15:53:29 GMT

In a real estate transaction, there are normally two real estate agents. One agent represents the buyer and one agent represents the seller. In rare cases, the same agent facilitates the transaction for both the buyer and the seller. This is know as “dual agency”. Not all states allow dual agency, but it is allowed in Washington state. When dual agency exists, the potential for conflicts of interest between the agent and their clients are substantial, particularly when negotiating price. The agent must be impartial and questions like “how much should I offer?” or “what do you think the house is worth?” must be left unanswered by the agent.

I came across a stunning example of a dual agency agreement today from a long-time agent in Seattle. Here is what it said:

“I understand that the property listed at 12345 Any Road NE is listed by Agent A. I have elected to utilize her services on the purchase of this property and not obtain a separate buyer’s agent. I understand she represents the sellers in this transaction.”

If you called Agent A to see the home that she listed, she will happily show you the home, but then try to get you to write an offer and sign this agreement. She tries to get you to use her services and not use a separate agent, and then she represents only the sellers in the transaction. The contract fails to mention the important part, which is she will be paid DOUBLE the commission if you don’t get your own agent. (She gets to keep the commission for both agents.) She gets paid double for making sure that the home sells for the highest possible price for the seller, while potentially knowing damaging information about the buyer’s situation. This is motivated by pure greed. Do not sign such an agreement if you value the advice you will receive from your real estate agent, since any advice she gives is “representing the seller.”

In most cases, dual agency is a bad idea. Any agent who agrees to a dual agency arrangement should be forthcoming about their compensation and must remain impartial, otherwise the buyer is subjected to a severely one-sided negotiation.

The risks of a successful short sale

kevin lisota — Tue, 27 Oct 2009 16:57:35 GMT

Last week we closed one of the messiest and most stressful transactions we have ever encountered. It was a short sale with two lien holders. Lien holders are the banks who owned the mortgages on the property. In a short sale, those lien holders are asked to release their interest in the property for a payoff less than what they are owed. Often lien holders will lose $100’s of thousands in this process, but it can be more appealing to them than a foreclosure. It is certainly more appealing to a seller than having a foreclosure.

Our buyers got the home that they loved at a good price, but not without a lot of pain and unexpected hurdles. Here is a blow-by-blow recap to see just what sort of obstacles you might have to overcome with a short sale.

Long timeframe – The property was originally listed in November 2008. They didn’t receive lien holder approval until September 2009, a full seven months later. We didn’t engage on the property until August, so we got lucky and the short sale approvals came through shortly after our offer. This is longer than normal for a short sale, but you need to be fully aware of the delays possible in a process like this. Often there is nothing you or your agent can do to make things move faster. Putting more aggressive deadlines on your offer won’t make anybody move faster.
Purchase price – The listing agent notched the price down eight times before it sold. Remember, the list price is set by the seller and listing agent as a “guess” on what it will take to receive an offer and also obtain bank approval. The bank had no input on the pricing, so when the final approval came, it was a full $25k higher than our offer at list price. The increased price was non-negotiable, since it had already gone through months of negotiation with the listing agent to get to that point.
Junior lien payoff – A 2nd mortgage is a junior lien that doesn’t get paid until the 1st mortgage is paid off. In our scenario, the 1st mortgage approved $5k of the proceeds to go to the 2nd mortgage holder. The 2nd mortgage holder wanted 4x that amount to release the seller of their obligation. The only way this would work was to have the buyer pay the remainder, which is what the 1st mortgage instructed us to do. Because it couldn’t be part of the sale proceeds, it also couldn’t be part of the purchase price. The buyers’ cash to close went up dramatically.
Short sales are negotiated between the seller and their lender – You may feel like you are negotiating the deal with a bank. Technically you are not. You negotiate with the seller, but the actual short sale negotiation is between the seller and their lender. This is an important nuance to remember when the negotiations don’t go your way.
Make it legal – An unconventional payoff of the 2nd lien needs to be disclosed and approved by all parties to the transaction. If you hide it, you are potentially committing mortgage fraud. None of us wanted to participate in a fraudulent transaction, so it required consultation with numerous lawyers and title companies before we finally found a solution. We found an escrow officer experienced in short sales that was able to craft a HUD-1 Settlement Statement that adequately disclosed all of the money being transferred and was ultimately approved by all parties in the transaction.
Inexperienced short-sale agents – The listing agent was a self-proclaimed “short sale expert”. As we found out, that expertise involved precisely two successful short sales and a lax attitude toward the legalities required by real estate settlement law. His choice of escrow agent seriously compromised our ability to close the transaction in a fully legal manner.
Delayed inspection – Inspections can cost $500+, and this one required an additional septic inspection. The buyers didn’t want to spend money on an inspection without having the transaction approved by the bank, for good reason. We knew that the roof needed repair. When bank approval arrived we promptly inspected the property to find that the roof was in worse shape than originally thought, not to mention a pesky rodent issue that needed attention. It would have been nice to evaluate these conditions earlier in the process, but that requires spending money on an inspection that may go nowhere.
“As-is” really means “As-is” – Sellers in a short sale often have little or no money. In our case, they were facing bankruptcy. When our inspection brought up issues that needed fixing, there was no money available to contribute from the seller. The banks don’t technically own the property and will not pay for repairs in a short sale. The logical next step was to ask the 1st mortgage holder to reduce their payoff amount to account for the big issues. Our numerous attempts at negotiation were met with coldly with one sentence: “NO – short sales are as-is”. Maybe you will get lucky and the sellers have some money to help with repairs, but assume that the buyer will have to pick up the tab for repairs. We’ve actually had better luck negotiating repairs on bank-owned properties than on short sales.
Tell your lender – Keep your lender informed on the details of the transaction. They need to approve it as well, and any unusual terms of the deal must surface early. We had to escalate our requests to an underwriting manager to get final buyoff on the buyers’ loan.
Watch for extension fees – The whole process got bogged down and we needed a two week extension for the bank approvals. Like banks are apt to do, they added a “per-diem” fee for each day it was extended to cover their holding costs. (about $1500) The seller had no money, so that left three parties able to pay: the listing agent, the buyers’ agent and the buyers. We ended up splitting this last minute surprise between the three of us to get the darned thing closed.
Big banks will do as they please – You are simply one file amongst hundreds on the desk of the bank’s negotiator. Sane and logical negotiation tactics that work in a regular sale will fall on deaf ears at these banks. If your transaction fits their guidelines, they will approve it. If it doesn’t fit their guidelines, they won’t. Their guidelines don’t always make sense, but they are not going to change them just for you. Remember, you are just another file to them.
Why won’t they accept our offer? – You may get in a situation where your offer appears more advantageous to the lenders than going to foreclosure. In the case of the 2nd mortgage, they would be paid nothing if the property was foreclosed, right? Not entirely true. Some banks have their own mortgage insurance which pays them an amount in the case of foreclosure, so they may get something. They may also be able to retain a judgment against the borrower for what they are owed. You also need to remember that banks’ motivations for writing off losses change month-to-month and quarter-to-quarter. They may be more or less motivated, depending on how they want to report their financial results for any given time period.

So what do we recommend if you do choose to pursue a short sale?

Make sure it is the right house – Short sales are full of risks and hassle. It needs to be the right house for you to go all the way through the process. If you are at all unsure about the house, continue your house hunting while the short sale approval is taking place.
Work with actual short sale experts – When things get messy, it can pay to have an agent, lawyer and escrow officer versed in short sales at your side. If you need to seek legal counsel in the process, by all means spend the extra money.
Be honest about the condition of the home – You may end up with the home “as-is.” Be honest about the condition of the home upfront and you won’t be surprised months later with a surprise set of repairs.
Patience – If you don’t have the patience to see the transaction through to completion, don’t bother. There is no magic recipe to make the big banks move faster, and no amount of pestering seems to impact their process.

Have home sellers lost their pride of ownership?

kevin lisota — Mon, 26 Oct 2009 16:15:36 GMT

Maybe I am a little old-fashioned, or maybe it is because I own a business, but I fundamentally believe that consumers want to be delighted by the products and services that they buy. If you are shelling out your hard-earned money, you want a product that performs as advertised, is reliable, and is affordable to purchase and own. People love Zappos because they have a wide selection of reasonably-priced shoes coupled with outstanding customer service. People are continually loyal to Honda because their cars have a history of reliability and consistency. People ship their overnight packages with FedEx because they know that FedEx will deliver on time at an affordable price. Selling a home involves these same buyer emotions and decisions, yet many home sellers fail to recognize it and jeopardize their chances of a successful sale. If you are selling a home, demonstrating your pride of ownership and committing to delivering a quality product to your buyer can go a long way towards a successful sale.

One of the agents in our office has a grandfather who is very particular about things that he sells. Whether he is selling you a car, a refrigerator, or a home, he takes the extra steps to make sure that he is selling you the best product possible. He cleans up the car, changes the oil and fixes minor issues before putting it up for sale. He makes sure the the refrigerator is spotless and demonstrates it in good working order when you come to look at it. Does he spend extra money and time to make these happen? Yes, but he ends up with happy buyers in the process and more importantly a successful sale.

Prepare your home before listing

Demonstrating this sort of pride of ownership when you go to sell your home starts when you prepare the home for sale. You have lived there awhile and know many of the quirks and problems in the house. Are there issues that you can fix upfront? Maybe it is as simple as touching up the paint or installing new furnace filters. Maybe it is more involved like fixing a problem with the plumbing or replacing a defective appliance. If you are diligent, you can even pay for your own home inspection upfront to identify issues that need attention prior to the sale. The inspection phase of a home purchase is loaded with pitfalls and potential for the sale to fail. By addressing many of the issues upfront, you can reduce the risk that the sale falls apart during inspection. If the home has some larger issues that you are not planning to fix, being upfront about those issues and accounting for them in your price will let your buyers get past that hurdle before they even make an offer.

Be flexible on inspection negotiations

Demonstrating pride of ownership can also help you overcome buyer objections to items that they do find during their inspection. Every home, no matter how new and how perfect, will surface some issues in a home inspection report. Many buyers don’t want the hassle of fixing things in their new home, and some have unreasonable expectations that the house will be “perfect” when they buy it. Only buyers of new construction can expect perfection, but a seller can help to deliver that perfection by agreeing to fix many items, even if they are small or seemingly insignificant. We see negotiations every day where buyers and sellers get into a disagreement over a ~$1000 list of items that could be fixed by a handyman. For a $400,000 purchase, is it really worth risking the loss of a qualified buyer over such a small amount?

Dealing with unreasonable buyers

The decline in the real estate market has brought out a segment of buyers who expect the world. They want a very large discount off of your list price, and they want you to fix every problem they find in the home. Are they being unreasonable? Yes, but put yourself in their shoes. Wouldn’t you want the house at a great price with no issues to worry about? When the buyers want everything, you are going to need to negotiate to bring things to resolution. Do what you can, within reason, to be flexible and give them some concessions to get them past the issues. All too often we hear “It’s an old house, of course it has issues. We’re not fixing anything.” That is hardly a recipe for buyer satisfaction or trust. Your chances for success go up if you can demonstrate some commitment to the quality of the product that you are selling, which is your home.

The pitfalls of selling “as-is”

Maybe your house has lots of problems, or maybe you don’t have the financial means to facilitate any repairs. Those are both valid situations where you may want to try to sell the home “as-is.” There are certainly buyers out there willing to purchase “as-is” if the issues are reflected in your pricing. More importantly, if you choose to sell “as-is”, you should be very upfront about what they are getting into. Here is an example. Let’s say that you know you need a new furnace, but cannot afford the $4000 replacement cost. One approach is to say “I’m selling it as-is. I know it needs a new furnace, so you are making an offer knowing that fact.” The second approach is to say nothing and let them find out that it needs a new furnace during their inspection. Even if both situations are “as-is”, I guarantee that the secretive approach to the problem is going to end up with them negotiating and asking for the furnace replacement.

The process of selling your home is an emotional and financially stressful one. Your real estate agent can help you navigate the process and come to a mutually acceptable resolution for both the buyer and seller. While your house doesn’t have to be perfect, demonstrating some flexibility and a commitment to selling a quality home will increase your chances of a successful sale in this tough real estate market.

Customers love findwell's service so much they buy us cakes!

kevin lisota — Sun, 25 Oct 2009 01:09:57 GMT

One of the most rewarding parts about being a real estate agent is handing the keys over to brand-new homeowners. I had the privilege to close a transaction for first-time buyers this week in Woodinville. The transaction was a short sale, and it was the most challenging and messy transaction we have done in the past year. I was convinced on three separate occasions that it would never close, yet after three months of seemingly insurmountable hurdles, we closed this week. Needless to say, the buyers are elated with their new home.

In a most unexpected show of gratitude, they brought me a findwell cake when we met at the house to hand them the keys. I was surprised and humbled by the gesture and am very happy that our customer service exceeded their expectations.

“Thanks to your tenacity and hard work, we are new homeowners!”

I can think of no stronger customer endorsement of our real estate services. We look forward to exceeding more customer expectations in the future (and receiving more tasty cakes!)

Checklist for the first week in your new home

kevin lisota — Sat, 24 Oct 2009 02:10:46 GMT

You just closed on the purchase of your new home and have the keys in your hand. The excitement has barely worn off, and you have already started your move. Other than arranging your move, here is a handy checklist of items that you will need to take care of during the first weeks in your new home.

Utility Accounts – You need to open new utility accounts in your name. Often the escrow company will pay the final utility balance for the sellers, but this does not open a new account for you. Depending on where you live (condo, rural, urban, etc), you will have to open utility accounts for your electricity, natural gas, water, sewer and garbage. When opening your accounts, you may be able to save a charge for meter reading if you take the meter reading yourself. You will also want to order any telephone, internet, cable TV or satellite services that you need. If the home has a security system that you want monitored, you will also have to contact the security company.
Re-key Locks – There is no telling who may still have a key to your new home, so you will want to re-key your locks so only you have access. You can either have a locksmith visit the home, or you can remove the locks from your doors and take them to a locksmith, saving you a trip charge. Be sure to have the key available so they do not have to pick the locks. Have a few extra keys made and get yourself a keybox to hide on the property. The hidden keybox will save you the hassle of locking yourself out and can also help if you need to have friends or family access the house when you are away.
Plan for Cleaning – Your idea of clean may not be the same as the seller’s. Sometimes sellers will leave a home in immaculate condition, but sometimes not. Plan to clean the home thoroughly before you move in. If you are planning to clean the carpets, do this immediately before you move in your furniture and allow some time for it to dry. It is far easier to clean carpets when a home is empty.
Paint When Rooms are Empty – It is a lot easier to paint an empty room before you move in your bulky furniture.
Change of Address – Start changing your billing address for all of your accounts such as bank accounts, credit cards, student loans, car loans, etc. Don’t forget to tell the Post Office where you live so they can forward your mail from your previous address. You can do it online here.
HOA Information – If you live in a condominium or subdivision with a homeowners association, you will want to figure out where you will be sending your monthly dues. It is also helpful to figure out who to contact for maintenance issues and requests. Be sure to ask when the association meetings are scheduled if you are interested in participating in the decision-making process for your association.
File Your Closing Documents – Home ownership will change your income tax situation in beneficial ways, but you will need your closing statement to figure out the correct tax basis for your property. File it away safely for your next tax return.
Read Your Inspection Report – Remember the inspection report you paid for during the purchase process? It is usually filled with helpful maintenance tips and other projects that will need your attention. Use it as a sort of “owners manual” to systems in your new home.
Window Coverings – If the home you bought lacks window coverings, it will take some time to select and order drapery and blinds. In the interim, you can purchase cheap paper accordion blinds to give you privacy until your chosen window coverings are installed.
Time to Take Care of the Yard – If you are coming from apartment or condo living, you may not have any yard tools, but you now have a yard to care for. You’ll likely need to make a trip to the store for things like a lawnmower, garden tools, snow shovels, etc. Get the basics to get you started and add to your collection as you need it. Craigslist can be a great resource for used items.
Don’t Make Major Changes Immediately – Everyone has grand plans for improvements and changes to their new house. Home updates are expensive and time-consuming. Before committing to costly remodeling projects, spend a few months living in the house to find out what actually annoys you and what you can live with for awhile. I guarantee that what is important to you at move-in will change once you have lived there for a few months.
Keep Track of Major Home Expenditures – You can only deduct mortgage interest and property taxes from your income tax return. However, you will want to keep records of major investments that you make in the home, as these can be added to the tax basis of your home and have the potential to reduce capital gains taxes when you sell, depending on how much your home has increased in value.

Ashworth Cottages Selling Quickly!

kevin lisota — Sat, 17 Oct 2009 17:39:58 GMT

I have been working with a client to purchase one of the Ashworth Cottages located just north of Greenlake at 80th and Ashworth Ave N. If you are not familiar with the project, this is a community of 20 stand-alone homes and townhomes that is situated around a central courtyard. It was originally built by Pryde & Johnson, and is the only LEED Platinum-certified community of its kind in Washington state. The builder spared little expense on these homes, with finishes like tiger wood floors, concrete counters, vaulted ceilings and cherry cabinetry.

The properties high-end finishes and green-friendly LEED certification originally landed them at a price point where they were unable to sell them in the down market during 2007-2008. After the bank foreclosed on the property, they are back on the market at some extremely attractive prices, something like 20-35% off of their original list prices. Buyers seem to agree, and it looks like they have sold 8 out of 17 homes in just a week! At this pace, it appears that they won’t last long, as they have hit a price point that appears to resonate with buyers for homes of this quality.

Here are some of the listings currently on the MLS. Availability is subject to change pretty quickly, so an on-site visit will tell you what is left.

8018-A Densmore Ave N

8011 Densmore Ave N

8019 Densmore Ave N

If you would like to tour these homes or would like assistance in putting together an offer, please contact us at info@findwell.com. We currently have availability for showings this weekend.

UPDATE 10/24/09: According to the listing agent, 12 of these homes are officially sold, up from 8 last week. There is only one townhome left, and the rest are stand-alone homes.

Use it or Lose it! – Make sure you use all of your seller-paid closing costs

kevin lisota — Fri, 09 Oct 2009 00:17:23 GMT

When you buy a home, one of the items you can negotiate with the seller is that you ask the seller to pay for all or a portion of your closing costs. Closing costs are the fees that you pay to buy a home, such as origination fees for your loan, recording fees or appraisal fees. Closing costs are NOT part of the purchase price and are separate from your down payment. Let’s take a look at a fictitious example.

In this example, the buyer is purchasing a home for $300,000. They plan to make a down payment of 20% ($60,000) and will take out a loan for 80% of the purchase price ($240,000). The buyer is also required to pay their closing costs, which in this simplified example come to $4,250. The total amount of cash that this buyer would provide to close the transaction is $64,250.

Purchase Price	$300,000
Down payment (20%)	$60,000
Loan amount (80%)	$240,000

Loan origination fee (1%)	$2,400
Hazard insurance	$600
Settlement fee	$500
Title insurance	$600
Recording fee	$150
TOTAL CLOSING COSTS	$4,250

Now, let’s say that as part of our negotiations to purchase the property, the buyer requested that the seller pay for their closing costs. During the negotiation, buyers have to work off of estimated closing costs, so it is difficult to pin down the exact total. Let’s look at three examples of seller-paid closing costs for this transaction.

Seller-paid closing costs = $2,000

Buyer pays their remaining closing costs of $2,250, plus their down payment of $60,000.

Seller-paid closing costs = $4,250

Buyer pays zero closing costs and only has to bring $60,000 for their down payment.

Seller-paid closing costs = $5,000

Buyer pays zero closing costs and still has to bring $60,000 for their down payment. Lenders will NOT allow closing cost contributions to be contributed towards a buyer’s down payment.
Seller only pays $4,250 towards closing costs, since there are no more closing costs to pay. Although the seller conceded an additional $750, they get to retain that amount.

The last example is the troubling one. If a buyer requests that the seller pays for more closing costs than they actually incur, the buyer will LOSE this money, even though the seller made that concession during the negotiation. Lenders will not allow this money to reduce the purchase price or down payment. There are two strategies to avoid this unfortunate circumstance for the buyer. First, try to be as accurate as possible when requesting closing costs to be paid by the seller. If you are unsure, err on the side of “not enough” and pay the remaining costs yourself, even if it is a few hundred dollars. Second, you may be able to use these additional seller contributions to “buy down” the interest rate on your loan. As a home buyer, you don’t want to lose out on a concession that your seller is willing to make. Spend time discussing your negotiation strategy with your real estate agent so that you don’t lose out on unused seller-paid closing costs.