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I'm stumbling through this myself. The lender I am working with (really nice guy recommended by my realtor) has approved me for FHA financing and they allow the seller to contribute 6% of the purchase price to clsoing. We made our first offer last night at 48K and asked for 6%. (They are asking 49K.) This means they make 45,120. My realtor suggested instead of haggling over the price, offer close to asking with the 6%. We'll still have to come up with something around 2,000 towards closing ourselves.

In our case, Don (realtor) said that we might want to buy the house for 45K and the seller might be happy enough to take it, but we don't want to haggle over everything. If an offer comes back refusing to pay the 6%, we'll just up our offer 49,999 which will leave them within pennies of the original 47 we offered while still keeping our downpayment at 1.25%. Worst case scenario, we offer 52,100, they'll get their whole 49K, and we'll have to put 2.25% down.

In any of these cases, we're going to need roughly $2000 to buy the house. Some of this is closing costs and some is pre-pays, like insurance, inspection, mortgage fees. And some of it is downpayment.

We wrote up the offer last night and said we wanted an answer by Friday. I am so nervous! Cross your fingers for me? I don't even care what the answer is! I just want an answer so I know what my next step is. I've pretty much decided that THIS is my house, and I just want to get the negotiations over with. I'm hoping that since it has been on the market a year that that is to our advantage. I also need to be out of rental lease limbo!

Good luck with your decision, Tanaquil. I doubt my post helped much. All I can really say is that in my case, it makes sense to get the seller to help with closing, essentially rolling the costs back into the loan. Keep us posted.

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