Who Pays Closing Costs In A WHOLESALE DEAL?

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Question: “Who pays closing costs in a Wholesale deal?

It is completely optional.

I had a friend call me the other day… he is buying a house and said, “Hey, I found this fee, is this normally real”.

And I was like, “yeah there could be a fee for everything, this is America.

You could charge a fee just for listening to me, it’s called consultation.

We charge a fee for anything and it’s absolutely legal to do that.

Just keep that in the back of your mind that there could be a fee for everything.

Closing Cost may come in all kinds of shapes and form when you are dealing with investment deals, they are usually cheaper

… but when you are dealing with a house that somebody’s gonna buy with the mortgage to live in.

You are gonna find the origination fee.

Mortgage, Origination fees and Mortgage fees, those are three different things.

These fees, like document fees you are going to find all kinds of craziness.

I am probably exaggerating a little bit but the point is that you are gonna find fees.

But when you are dealing with an investment deal, it’s not that much.

So for the most part, we always offer our sellers that we will pay the closing cost.

Why? Because I know I am gonna make $35,000 so I can handle $3,000 to $4,000 closing fee

… because the seller’s closing fee is usually not a lot as compared to a buyer’s closing cost.

Closing cost for the buyer includes all the finances fees and all different craziness of fees.


But the seller’s fee is the realty transfer fees, title fees and a couple of things… maybe $300 for something over here and there.

Before you spend $2,000-$5,000 at most depending on the size of the deal, the closing costs are covered.

So if I am gonna make $20,000, that’s a reason why I only market to neighborhoods where the values are $100,000 or more because I wanna have room to be able to pay for that.

Because it would sound better when I say, “Hey, I wanna pay the closing cost” than “Hey just give me your house very cheaply.” for no reason.

It’s a part of how we make the deal a lot sweeter.

So, Who pays the closing costs in a Wholesale Deal?

Typically it is supposed to be either the Buyer or the Seller but sometimes you just wanna say “Hey I’ll pay the closing cost.

I don’t know if you’ve heard this story before, the first deal I closed back in 2005

… I was making $20,000 and the guy came to the table and noticed I did something wrong.

That’s why he was able to see how much money I was making but I was making $20,000 and said “Hay you are not gonna make $20,000 off of me”.

And then I thought the deal was about to fall through, after all I’ve never made that kind of money before.

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I was scratching my neck and said “you know what, I’ll give you $10,000” then he said “You got a deal”.

… then I made $10,000 back on December 20, 2005.

But my point there is that, it didn’t have to be $10,000 that I gave to him, I didn’t have to split down the middle.

I could have easily said, “You know what you have a $3,000 closing fee here, I’ll cover that”.

And you’ll never know he might say “Okay, so I get to walk with just $40,000 flat fee” and I’ll say “Yeah”.

I could have closed the deal.

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It’s a way for us to negotiate to make the deal feel sweeter to the seller and even with the buyer, like “hey, listen. I am okay with the deal. I’ll pick-up half of your closing cost
… but don’t over do it because they will start feeling like maybe you are trying to hide something.

What I am saying is when it comes down to it and you have to negotiate, feel free to offer to pay someone’s closing cost and then the closing agents will adjust the numbers and everybody’s happy.

So as far as, Who pays the closing cost in a wholesale deal?…

It varies… It depends.

I always offer to pay the closing cost as a way to make deals sweeter.

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