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Established Member
Posts: 69
Registered: ‎02-02-2012
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Why are our closing costs so high?

$222,227.00 purchase price FHA loan 3.5% down TOTAL with 3.5% AND closing costs is $15,767.00 out of pocket because the home had multiple offers we couldn't risk asking for concessions.

Established Member
Posts: 21
Registered: ‎06-09-2012
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Re: Why are our closing costs so high?

So you're closing costs are about $7500?  Is that what I am reading?

Established Member
Posts: 69
Registered: ‎02-02-2012
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Re: Why are our closing costs so high?

yes that is correct and all of it is coming from our savings that will have just pennies left when we are all done. We could not ask for concessions becasue of multiple offers

Regular Contributor
Posts: 226
Registered: ‎05-24-2012
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Re: Why are our closing costs so high?

$7500 is pretty normal costs for closing. The only thing you can do differently is to ask the loan officer you are going with what if any of those costs can be financed. This would help free up some cash.

Senior Contributor
Posts: 3,067
Registered: ‎11-02-2009
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Re: Why are our closing costs so high?

I don't know how far along you are in the process, but you could also explore whether you could get a credit from the lender and take a slightly less competitive interest rate.  Basically the reverse of paying points for a better rate.  Might be something to consider if you are concerned about having no savings left.


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Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
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Senior Contributor
Posts: 3,889
Registered: ‎05-24-2011
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Re: Why are our closing costs so high?

We were offered this, but ONLY after we had a signed purchase agreement and were approved through desktop underwriting, which was months after we had our preapproval. I think my LO didn't want me to get my hopes up, and wanted us to have the money just in case or something....IDK. I wish I had known in advance this was an option. It saved us tons. Our rate went up .25 Percent, which was figured here to be 8k over the life of the loan.
STARTING: 11/24/10 EQ-584 EXP-648 TU04-595
CLOSED FIRST HOME 8/19/11 EQ-630 EXP-691 TU04-653
CURRENT: EQ-701 EXP-??? TU08-720
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Posts: 2,982
Registered: ‎02-09-2012
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Re: Why are our closing costs so high?

I do not know enough about home buying, but how do you know there are multiple offers?

 

How is anyone for sure that there is not some sort of sick conspiracy between the two agents?  I've lied to many of customer to increase my commission pay-out, and that was for funny-money.  When you start talking about $200k - that's a lot of commission to be gained.

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Established Member
Posts: 69
Registered: ‎02-02-2012
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Re: Why are our closing costs so high?

well I just messaged our loan officer asking if this was a possibility he is probably going to think we are insane suggesting this now being that we already signed a purchase agreement and went through underwriting. just waiting on our appraisal date.

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Senior Contributor
Posts: 3,067
Registered: ‎11-02-2009
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Re: Why are our closing costs so high?


Repo-ed wrote:

I do not know enough about home buying, but how do you know there are multiple offers?

 

How is anyone for sure that there is not some sort of sick conspiracy between the two agents?  I've lied to many of customer to increase my commission pay-out, and that was for funny-money.  When you start talking about $200k - that's a lot of commission to be gained.


You don't.  But you can have a general idea of what the market is like and make your own assessment of whether you think it is BS or not.  Also, depending on the agents involved, some of them have worked with each other before and have a sense of the other agents' ethics.


Starting Score: ~500 (12/01/2008)
Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
Goal Score: 720


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Posts: 6,474
Registered: ‎03-06-2010
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Re: Why are our closing costs so high?


Repo-ed wrote:

I do not know enough about home buying, but how do you know there are multiple offers?

 

How is anyone for sure that there is not some sort of sick conspiracy between the two agents?  I've lied to many of customer to increase my commission pay-out, and that was for funny-money.  When you start talking about $200k - that's a lot of commission to be gained.



From an agent's point of view: they wouldn't be in the business very long if they pulled that cr*p on another agent. The agent community is pretty small and we know how other agents work if they have been in the business any length of time. There is nothing in it for the agent to say there is multiple offers when there aren't multiple offers. Only one deal at a time can close on a given property. When there are multiple offers (which is typical in the prices under $200k in my area) there is a "highest and best" required by X date and time that's posted. Don't get me wrong, there is a certain amount of "poker face" involved in negotiations, but the agent that states there are multiple offers will lose his business if there aren't really multiple offers - that is a huge price to pay.

 

As to the commission, it is no where near as large as you think. It is split up a bunch of different ways and if the property is an REO property, the listing agent has a reduced fee anyway (highly reduced).

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