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).
|Scenario #1 (traditional sale)||Scenario #2 ($20,000 'low-ball')||Scenario #3 (seller credit, 20k)|
|20% Down Payment||$110,000||$106,000||$110,000|
|30 Year Fixed Rate||6.25%||6.25%||5.0%|
|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.|