Annapolis Real Estate and Homes for Sale and Waterfront Properties in Maryland: A 1% Buy Down Saved the Day!

We, the Team, have been using this to successfully negotiate a win win solution for our buyers and sellers.

In this example the buyer pays $45,000 more for the house but pays $15.00 less in payment than their lower offer and saves more than $50,000 in interest over the life of the loan.

Don't let the negotiations fail use a buy down to reduce the buyer's rate by 1%.

Consider this example. The buyers like the house and makes an offer that achieves their max monthly P and I payment of $2191.67. The seller won't go that low. They can't agree on price, but they can still make the transaction happen with a buy down.

Things to consider-

1. Are the parties motivated to make the transaction work?

2. Does the buyer sees the value in the property, but is more concerned with the monthly cost than the total sales price

3. The seller is willing to pay the points necessary to buy the rate down to achieve the buyer's monthly payment target.

Example:

List Price $450,000

Financing - FHA loan $434,250 at 5.5% fixed for 30 years, payment P&I* would be $2456.62
Buyer offers:

$400,000 with a FHA loan of 386,000 at 5.5% fixed for 30 years, payment P&I would be $2191.67
The buyer is not sure they can afford to pay the $450,000 price. However, they like property and can see the value.

The seller has some flexibility but $400,000 is too below market.

Seller counters with $445,000 and 3 points ($12,882.75) to buy down the rate.

The buyer with a FHA loan of $429,425 at 4.5% fixed for 30 years, payment P&I $2175.83

The buyer pays $15.00 less in payment and saves more than $50,000 in interest over the life of the loan.
(P&I* principal and interest on the loan)

For More Valuable Real Estate Information visit:

http://freereports.annapolishomes4you.com/

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Thank you for your time, if there is ever anything I can help you with, don't hesitate to ask.

“It’s a funny thing about life; if you refuse to accept anything but the best…you very often get it” Somerset Maugham

"Expect the Best" Pat Ogle

Pat Ogle, Associate Broker, CRS, DSAC, e-Pro, GRI, MCJ, REALTOR®

Certified Residential Specialist / Certified Internet Marketing Specialist