When seller pays closing cost does that mean we are borrowing the closing costs from them?

Question

my real estate agent says that when a buyer asks a seller to pay closing costs it means that you are borrowing the money from the seller and are paying them back in the amount financed for the home. Is that true.

Answer 1

The past 2 posters are both correct.

When the market was great, we would increase the price of the house to pay the closing costs.  

However, now that the market is slow, we pay closing costs like the 2nd poster said.

Answer 2

Yes, that is the standard definition for "seller pays closing costs".

As the seller, they just add the "closing costs" to the price of the house.

If house price was originally $200,000 and seller agrees to "pay closing costs" of $5000, they will now ask $205.000 for the house.

So you're really just financing the closing costs. Seller isn't out a dime. The advantage to you (the buyer), is less out-of -pocket costs up front.

Answer 3

That is absolutely FALSE!  When the seller pays your closing costs, they PAY them.  They are not loaning you, the buyer, money. What is your situation? Is this new construction maybe?