Your lender (bank or mortgage broker) has met with you and requested verification of income, credit worthiness and available cash. Or the last item is going to be wrapped up in a fancy mortgage. The alternative is to ask the Seller to “participate” in funding. This is usually done by raising the price of your offer to accommodate the shortfall. At this point in a transaction I become uneasy. It is difficult for me to understand how a person can expect to purchase a home or an automobile, for that matter, without at least a down payment. ( I do understand a VA mortgage of this no money down type only because our government considers a veteran’s time spent in uniform as enough down payment.)
Getting back to dollars and sense, in a real estate transaction there are typically a long list of buyer’s closing costs. They commence with home inspections, (roof and septic are extra). The property to be purchased must have a survey and appraisal. The typical fees will include: tax servicing, flood certification, credit report, title insurance, pre-paid insurance, recording, documentary stamps on the mortgage and bank processing fee, plus origination fee. These last two items are negotiable usually.
Again it is often a part of negotiating the offer to ask the seller to “participate” in these expenses. Wait a minute! Isn’t the seller obligated to pay the commission on the sale? This includes the Seller’s broker and your Buyer broker! The seller also in many states pays for title insurance and stamps on the deed. The property taxes are pro-rated as of the date of closing.
Buying a home should be a joyous affair. Be prepared and investigate before you invest.