It may be possible in the near future to get paid for buying a house! In today’s blog article, we are going to look at how this might work and what needs to happen if you want to get paid for buying a house. This article is mostly for first time home buyers looking for a leg up in the market who might be short on cash.
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Why buyer’s may want to get paid for buying a house. . .
If you have been following my blog for a while now, you are aware that the #1 most surprising fact for new buyers is that closing costs can be $7,000 to $10,000, and this is in addition to the down payment!
The monster in the closet: Closing costs
Home buyers all know that they need a down payment. Usually, it is 3.5% of the house value. On a $200,000 home, this would be $7,000. When buyers have the $7,000, they get excited and they start shopping.
But they are always surprised to see the first loan estimate which states that they need $14,000 to $16,000 to close. Where did all that extra money come from? What happened to just needing 3.5% down?
The secret to this large inflation in price is all the additional costs that are part of the transaction. Both the buyer and the seller have to share the cost of escrow companies, title searches, recording fees, and other charges which are not part of the down payment. The down payment goes from the buyer to the seller and covers none of these additional costs. These additional costs are called: closing costs.
Fighting the Monster with Incentive Programs
There have always been ways to get paid for buying a house. There is a new way coming soon. First, let’s review some of the ways we use already.
New Construction Incentives
New construction fights the hidden monster of closing costs by offering incentive programs. One buyer recently chose to work with the builder’s preferred lender, because the builder gave $7,000 to the buyer to cover the closing costs. This is fantastic, but traditionally it is only available on new construction, and most first-time home buyers cannot afford to purchase new construction, even with the extra help.
Down payment assistance programs and seller credit.
When I represent a buyer, I tend to ask the bank to look into down payment assistance and seller credit. Using some fancy trickery with the loan application, we can usually get the seller to offer $7,000 toward the buyer’s closing costs. This technique has worked well for me, and really helps cut the costs. This trick still works today, and I can usually get you cash to close through this kind of technique.
If the seller is covering closing costs, there is also usually a down payment assistance program for people who qualify. The CalHFA program (pronounced Cal-ha’fa) provides money to pay the down payment when the buyer has none and is low income. Unfortunately, CalHFA has been hard to get after March 2020 when Coronavirus changed the face of banking in California.
A third option is coming… Soon you will be able to get paid for buying a house by me!
If you read my article targeted to investors about an investment deal that I lost out on, you know that I was in a position earlier this year to pay 100% of the closing costs and down-payment for the buyer of an investment home. Unfortunately, I lost out on that $30,000 deal.
That deal got me thinking. Is there another way that I could pay for buyer closing costs? How can I make it so that all my buyers get paid for buying a house?
Small potatoes but a good start
One of my buyers asked me last year if I paid for home inspections. He said that one realtor he worked with paid for home inspections for his clients. Truth be told, I can’t afford it. At least I couldn’t then, but I have discovered something better than paying for home inspections.
A home inspection for my average first-time home buyer is $500. But, what if I could give the buyer as much as $2,000 to cover the closing costs or down payment at the buyer’s choice? Wouldn’t that be better?
I discovered the answer
I discovered a way to make exactly this happen! Now you will be able to get paid for buying a house.
If things go as planned, I will be able to pay 30% of my commission to you for buying a house. Money is paid to your escrow account, which means that you can use it for down payment or closing costs. And, if the average home in Bakersfield is $250,000, and the average commission split is 2.5%, then that means you would receive $1,8751$250,000 x 2.5% x 30% = $1,8752!!!
Want more information on how to get paid for buying a house?
Would you like to know more? Tell me where you want me to send the information and announcements about the Buyer Payout Program by submitting the form below.
Buyers who participate in the Buyer Payout Program will receive 30% of my commission towards their closing costs. This can range between $1,350 to $2,250 on my average sale. Tell me below where to send information on how to get access to this free cash.
Participants of this buyer payout option are still eligible to receive the Seller Contribution of up to $7,000, which we typically negotiate as part of the purchase contract. If the buyer combines both the seller contribution and the buyer payout program cash, you could get paid almost $10,000 to buy your first home. If that excites you, tell me where to send more information below.
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