A Costly Mistake in Buying a Home for Sale in St Louis

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It happens every day to people just like you. Tens of thousands of dollars lost from one wrong decision and most home buyers never know that it happened.  Here is the scenario: A buyer shops for a home listed for sale in St Louis.  They negotiate the lowest purchase price and they find a lender who has the lowest combination of rate and cost.  Ten years later, they sell their home. Hopefully they made a little money or at least broke even.  Regardless, what they  do not realize is that a mistake when they purchased their home ten year ago resulted in them receiving tens of thousands of dollars less than they could have received had they made a different choice in their negotiating strategy. 

OK, OK, I know what you are thinking; How can negotiating the lowest sales price and finding the lowest combination of rate and closing cost,  cost a buyer  tens of thousands of dollars? That is a legitimate question, especially when you consider that virtually every home purchased in St Louis employs the same strategy.  While most home buyers think their only option is to ask the seller to reduce the sales price, there is another option that is rarely considered, at least in the St Louis home market.  That option is to ask the seller to pay discount points, which in turn reduces the buyer's interest rate over the life of the loan.  While buyer paid discount points is not common in the St Louis home sale market, it is common in other parts of the country and for good reason; it saves many home buyers lots of money.  

This does NOT mean that seller paid discount points is not the best option for every buyer and it is important that every buyer meet with a professional Mortgage Manager to analyze all options prior to making an offer on a new home.  While most loan officers will give you their opinion on seller paid discount points a true Mortgage Manager will leave nothing to chance and will  show you the savings and cost of different scenarios. It is also important to work with an agent familiar with seller paid discount points and knows how to structure and present such an offer to a seller. If you are looking at a home for sale in the St Louis market, don't make assumptions. Know your best option before you ever move forward.


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