Don't Get Stuck Paying Extra! Negotiate Your Closing Costs.

You saved for the down payment, the mortgage, moving costs, and tons of other small fees. So when you start looking at closing costs that are anywhere from 3 percent to 5 percent of the sale price, you can start to get a little overwhelmed. Seriously, on a $200,000 house that’s anywhere from $6,000 to $10,000. So how do you pay as little of that as possible? Like, hopefully zero?  Negotiate, negotiate, negotiate.

You better shop around

Just because your lender recommends a specific attorney that doesn’t mean you have to use them. Shop around and find the best deal for any third-party service. That includes home inspectors, surveyors, and title insurance. Your lender might push back if they have a professional relationship with a provider, but do what’s right for you. You may be able to find someone who does high-quality work but charges a little less than the original recommendation. 

Lose the administrative fees

Lenders might be willing to waive an application fee once they’re sure you’re working with them. That's especially true if you have other loans with them or if you got a mortgage with them in the past. Try asking for an itemized list and ask a lot of questions about what each fee covers. Your lender might have a standard number that includes things like courier and mail fees might be built in, but if your lender did everything electronically, you can ask for them to be waived. 

Know not everything’s negotiable

There are some things that just aren’t negotiable. Pretty much anything that’s associated with taxes or other state or local government fees has to be paid by someone. Those costs include:

• Taxes

• City and county stamps

• Recording fees

• Prorated interest and reserves

Negotiate closing costs with your seller

Sure, there are some parts of the closing cost that have to be paid, but that doesn't mean you have to be the one to do it. You can ask your seller to pay some or all of the closing costs as part of the negotiation. You can also try to negotiate the price of the home down to make up for the closing cost. 

Before you start throwing numbers out there, make sure you talk to your Realtor about what's realistic in your market. If you're in a sellers market there might be a lot of other offers on the house and the seller might not want to waste time on someone who's asking for too much.