Experience You Can Trust

Home Seller Tool For 2019

Home Seller Tool For 2019

We have experienced seven years of multiple offers and short supplies of housing inventory in Orange County. This year, 2019, will be a little different with much more inventory. We need to pull out the old bag of tricks again. Here is a description of a “Seller Buy Down” and how it helps both the buyer lower payments and the seller get more net from the sale. Loan Officer Kevin Budde explains below.

A buyer wants to keep his monthly principal & interest payment under $4,500. He makes an offer $75,000 lower than the asking price of $1,250,000 because the 80% loan on a sales price of $1,175,000 is $940,000. At 4.00%, the principal & interest payment is $4,487.

$1,250,000 – $75,000 = $1,175,000 x 80% = $940,000 @ 4.00% = $4,487 P&I

 The seller counters at full price but offers to pay 2 points on the buyer’s new loan to buy the interest rate down one-half percent. The principal & interest payment is now under $4,500 the buyer wants on the 80% loan of $1,000,000.

$1,250,000 x 80% = $1,000,000 @ 3.5% = $4,490 P&I

 The seller is able to get the price he needs, the buyer is able to get the payment he needs and the seller nets $55,000 more.

$75,000 price reduction versus a $20,000 point buy down cost saves $55,000

 Using seller credits towards interest rate buy downs for buyers creates win-win transactions for both parties.

If I can assist you with specific calculations on your next offer please let me know, I’m happy to help you.

Kevin Budde  949-422-2075


Experience Counts – Call Ron Buck at Keller Williams Realty in Laguna Niguel bre#01364665

949-456-0505  or RonBuckGroup@gmail.com





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