It is a very exciting as more and more agents recognize that seller credits (when used to buy down rates and lower closing costs) are critical parts of the transaction recipe and are responsible for getting the cake, not only baked, but baked on time. It is the closest thing to smoke and mirrors when we can show buyers that with some cooperation and cash from the sellers, our proposed offer is not actually $100k away from the seller's listed price. And when they buy that house for $1 million, the closing costs and ongoing payments will look and feel like they paid $83,000 less. Said another way, if they qualify for a home purchase of $1 million, they will be able to actually purchase a home priced at $1,083,000 with the use of seller credits. (The above examples are obviously impacted by the dollar amount of seller credits, interest rates on a given transaction, choice of mortgage plan of the buyer and several other related factors).
This is not risky financing. There is no increase in cash to close. There is no increase in monthly payments, even with taxes and insurance. There is no negaitve amortization. And it works with fixed or adjustable loans and even with 100% financing. It may not be the magic bullet of the home buying process. But it sure can help getting deals done.
All the best,
Douglas Moore, Alain Pinel Realtors, Walnut Creek, CA 925 708 8988.
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