When a home seller agrees to pay all closing costs, does the buyer need to pay for any of them up front?
We’ve received an acceptable counter offer from the seller and they’ve agreed to pay all closing costs, up to 6% of the purchase amount (FHA loan). I understand that first year’s homeowner insurance, appraisal and inspection are included in that. Do we, as the buyer, have to pay out-of-pocket for any of those things and wait for reimbursement on the closing date? Or does the seller pay the costs as they’re accrued? We’re in Michigan, if that helps. Also, the closing costs in our good faith letter appear to be far less than 6% of the purchase price. Please indicate the source of your information (experience, profession, heard it from a friend.) Thanks for any help you can give.
I should be clearer. The agreed-upon contract states, “seller to pay up to 6% of sale price for buyer’s closing costs, pre-paids, inspections, or any other lender approved costs at close.” It’s the “at close” part I’m wondering about. They’re agreeing to pay those things (up to a %, of course) but I’m wondering will an inspector delay payment until the deal closes? I wouldn’t think so. So are we, as buyers, supposed to front that money? For instance, If a seller agrees to pay for an inspection, would the bill for the inspection go to the seller?