Risks of Paying Closing Costs for Buyers

Closing costs for a buyer consist of all costs associated with procuring a mortgage and pre-paids (escrow of real estate taxes and insurance). These costs range between 4-6% of the sales price. The biggest risk is having an appraisal shortfall of increasing the sales price to offset the seller’s you run the risk of pricing the home higher than the appraisal and then the buyer not being able to get a loan based on the higher contract price.