Price Reduction vs. Seller Credit

When buyers decide that they want to make an offer to purchase a property, often their fist instict is to offer less than asking price. This stems from a desire to save money, which we all want to do, and can perfectly understand. There is a problem with this approach though. In market where a property will see multiple offers (yes, even now, we are seeing many properties that are in a bidding war), you as a buyer stand a chance to loose out in the end. There are hundreds of ways to save money with real estate and during a consultation with us, we'll show you each and every way!



Here we present a scenario, in which the buyer saves a significant amount of money, without the hassle of having to justify a "low-ball" offer, or risk offending the seller (which is even worse).

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	Scenario #1 (traditional sale)	Scenario #2 ($20,000 'low-ball')	Scenario #3 (seller credit, 20k)
Sales Price	$550,000	$530,000	$550,000
20% Down Payment	$110,000	$106,000	$110,000
Loan Amount	$440,000	$424,000	$440,000
30 Year Fixed Rate	6.25%	6.25%	5.0%
Payment	$2,709	$2,610	$2,362
Savings of	None	$99	$347
As we can see, asking the seller to credit some money (at closing) toward buying down the interest rate, we have a greater savings over just asking for a discount on the purchase price. An additional benefit to this method is, a buyer who barely qualifies, or doesn't qualify at all, using the traditional, or discounted numbers, now qualifies with the seller credit because, the payment is less of a burden on Mr. Buyer's income ratio.