How can you get help with closing costs as a first-time home buyer?

Even though it is considered a seller's market in 2023. I have closed several transactions with my first-time home buyer's receiving seller contributions towards closing costs. This reduces the amount of money my clients need for closing. Or it was used to buy down their interest rate for a lower payment. It is important for agents to discuss this with their lender's before making an offer. But a great idea when negotiating a deal!

Negotiating seller credits toward closing costs... It boils down to the math, whether the seller is okay with the final $ figure, and if the amounts work with the buyer's lender. Credit #1: Seller credit to buyer is done in Escrow (in So Cal). It DOES NOT mean that the seller gives gives cash to the buyer at the end. Rather, it reduces the amount that the buyer puts in from their pocket in escrow. Talk to your lender BEFORE putting this in an offer in case of restrictions or the need for specific language. Credit #2: Interest rate buy-down. Can be temporary or permanent. This type of closing cost credit is used to buy a lower interest rate, leading to a lower monthly payment. Again, consult your lender BEFORE you stick it in an offer.

In Pittsburgh, The closing costs are more likely to be 6-8% of the purchase price for the first time buyer who isn't prepared, while less in the upper price ranges. Not everything is proportional. But the transfer tax for the City of Pittsburgh is 5%, split equally between buyer and seller. So that's $2500 to the buyer alone on a $100,000 house. On top of that they will have title insurance, lender fees, inspection costs, pre-paid taxes and more. For buyers who are short on cash, we turn to seller paid closing costs, gift money, local grant programs and lender paid closing costs. First time buyers need to work with an experienced agent who can guide them to resources and a seasoned lender who is up to date on assistance programs.

First-time homebuyers can get help with closing costs by: 1. **Down Payment Assistance Programs**: Research local programs that offer grants or loans for closing costs. 2. **Seller Contributions**: Negotiate with the seller to cover part of the closing costs. 3. **Government Grants**: Explore federal or state grants designed to aid first-time buyers. 4. **Lender Credits**: Some lenders offer credits that can offset closing costs. 5. **Gifts from Family* 6. **Negotiation**: Work with your realtor to negotiate favorable terms. 7. *Employee Assistance program. 8. *Non-Profit Organizations* 9. *Closing Cost Loans* 10. *Tax Credits* Exploring these options can provide financial relief for first-time homebuyers during the closing process.

In 2019, I had an eager buyer client who made 12 offers on the space of 3 months, trying to get the seller of a new listing to agree to seller assist and an FHA mortgage. He purchased his perfect home once he agreed to look at homes that had lingered on the market for more than a month and he piggy-backed seller assist on top of a county grant program to get into the home for less than $3K out of pocket. Yay!