It was a popular practice about a year ago when we raise the price of the offer by 6% to cover the buyer's anticipated closing costs. The seller would give the buyer a 6% credit at closing towards "closing costs". The confusions is also that buyers think that the seller is actually paying the closing costs; they are just giving a credit of the purchase price. It has become a bit more tricky these days.

First of all, not all foreclosure sellers want to see 6% sellers' concessions; and they frown upon 6%. Again, it all depends upon the different companeis involved. The other problem is due to the foreclosures and few short sales that actually close, prices are way down and that presents a problem with an appraisal and bumping up the price by 6%, it needs to appraise. Also, the verbiage should read, "credit towards buyers closings costs, prepaids and non-allowables". We have had experience where we are ready to close and the bank says, it was only for closing costs, not prepaids or "non-allowables". Make sure your realtor is experienced when it comes to writing a contract.

My advice to buyers is to be prepared to have the closing costs plus your down payment in the event you need it. Don't get disappointed after you have found your dream home.