Definition

• In a seller assist mortgage, the seller agrees to pay some of the closing costs associated with selling the home. These costs vary, but include all the fees that the title company and lender would normally charge to the buyer, including the title search fee, the loan origination fee, the escrow fee and any other extra expenses. Together, these costs typically cost several thousand dollars and can reach to $10,000 or more, depending on the transaction. The seller agrees to assist in paying these costs when the transaction is completed.
  
  

Process

• Real estate agents include seller assist clauses in the contracts they draw up for buyers. These clauses typically ask for a percentage of the home price -- the amount of the mortgage -- to be spent on closing costs. Lenders must typically allow sellers to agree to these clauses and have their own rules pertaining to seller assist acceptance. Clauses generally ask for either three or six percent of the mortgage amount be applied to closing costs. In other words, if the mortgage was for $100,000, then the lender or seller would pay either $3,000 or $6,000 in closing costs.
  
  

Advantages

• The main advantage to a seller assist mortgage is that buyer can save money on the transaction. This makes it easier for the buyer to afford the property and come to an agreement on the primary purchase price. The seller benefits from an easier sale if he agrees to the terms, and both parties can walk away satisfied if time is an issue.
  
  

Short Sales and Foreclosures

• In short sales and foreclosures, lenders must typically pay the closing costs themselves. Lenders are rarely as open to negotiation as private sellers. They have quotas they must meet and often have policies requiring them to refuse all seller assist clauses to avoid losing money. Buyers investing in these properties should be prepared to forego a seller assist in order to get the property.