Thread: Help - Rural Development Loan - Time to close, etc

Hello. I have received some good advice here in the past and hope I can get some timely input on my current situation (we have to provide counter by 5 today). First the current state, then I'll give some history. Sorry for the length.

We have been made an offer (NOT contingent on them selling a home) on our house at 10% below our reduced price AND the buyer is asking for 4.5% from us for closing and prepaids - our closing costs here in TN would normally be well below that (we do know the buyer cannot afford the closing costs and are planning to finance 100%). Are they maybe having us pay points? They are doing this with a Rural Development mortgage. We really want to try to do this deal as there our houses going up for sale like crazy in our neighborhood, comps are low, and worst, the house across from us is being sold as a foreclosure asking 30% less than our reduced price (similar SF and 1 acre vs our .4 acre). Scary times to be picky.

Questions:

1. What do you think is going on with the 4.5% request. Why so high? points? (our counter will at the very most say UP TO 4.5% as they did not inlcude these words).

2. Are "prepaids" referring to points or could that be something else? wondering if I could counter with up to 4.5% of closing costs and leave off the term "prepaids". Or maybe that would create a potential shortage at closing?

3. Rural Development loans. they have placed a closing date target of 2/26 on the offer but we are hearing horror stories on how long these loans take - what are your recent experiences and should we be comfortable leaving that date as is on their offer?

History on why we are considering:

Besides above about the neighborhood:
- We have been for sale for about 4-5 months - we reduce our price to just above a contingent we got and were not warm and fuzzy about (the reduction amounted to just 3% from original).
- This contingency expired last month and was not extended - we don't have "bird in hand"
- The buy contigency we have on our perfect house was kindly extended until 3/31 after the pvs 3 month contingency expired but we worry of losing that home.
- I fear the foreclosure and other comps might have us at a disadvantage to where we are even more tempted to make this deal work.

thanks for ANY help!!