When buying a home, many people seem to have tunnel vision on the list price and focus on nothing else. However, the list price isn’t the only thing you have to worry about when buying a home, as there are a wide variety of other expenses you need to pay. These expenses are known as closing costs, and they can vary wildly depending on the home and the seller. If you’re not properly prepared for closing costs, they can really do a lot of financial damage to you. However, with some good negotiating tactics, you may be able to lower closing costs to a much more manageable level. So how exactly can you negotiate for lower closing costs? Let’s take a look.

Have the Seller Contribute
One of the best ways to get around paying less in closing costs is by getting the seller to contribute some money. Rather than negotiate with your lender about closing costs, this idea has you negotiating with the seller. A seller may be reluctant to cover some of the closing costs, as it’ll eat into the profits they gain from selling the home. However, if they fear the deal may fall through, they may contribute just for convenience’s sake and to close the deal. Be careful not to ask too much, though, as you don’t want to add too many new factors to their seller closing costs calculator since it could jeopardize the deal. However, if done correctly, negotiating with a less experienced seller and getting them to contribute could be a much easier prospect than negotiating better rates with an experienced lender.
Shop Around
When making any big purchase, you should always shop around for the best deal. If you engaged in talks with a lender, then you don’t need to limit your conversations with just them. Shopping around and finding different vendors can find you better rates and may even land you a lender with fewer fees. You can then go back to your lender, using the lower rates as leverage. Some lenders will match any deal you find, while others will turn you away and make you switch. Regardless of what happens, you’ll be saving money, sometimes upwards of a thousand dollars.
Close at the End of the Month
One of the best ways to pay less for closing costs is to close at the end of the month. While this isn’t really a negotiation tactic, it still is a great trick to spend even less on closing the deal. First, you’ll pay less in prepaid interest since there are fewer days between the day you close and the end of the month. In fact, just delaying your closing a few weeks and wrapping everything up at the end of the month can save you a few hundred dollars. The lower closing costs can open up some financial flexibility for you, allowing you to spend that money on other closing costs or in other areas entirely
Factor Costs Into the Mortgage
A last resort that you may want to consider is folding your closing costs into your mortgage. This idea has obvious advantages and drawbacks. On the positive side, taking out slightly extra to cover closing costs can quickly eliminate a major headache for you. This can be especially helpful if you’ve exhausted all of your savings on the down payment and have little money to cover the remaining costs. However, the major drawback of this idea is the money you’ll have to pay back in interest. Since you’ll have a slightly bigger mortgage, you’ll end paying even more in interest. As a result, in the long-run, this idea will actually lose you money in exchange for temporary convenience. That being said, in certain scenarios, this could be a good option for you to close the deal out.