Asking Seller’s to Pay For Interest Rate Buy Down
New to Real Estate · Member since 2023 · 44 posts · 19 votes
Hey everyone,
So I am recently under contract for a property that I negotiated from 180k to 175k with 2.5k seller’s credit. I had an inspection contingency where I wanted an inspection but would ask for no repairs.
Pass forward to after the inspection, and I find out that it’s pretty clear. No structural issues or hazards with the property but still definitely some things to fix like grounding wires, rubber roofing, etc. Can I still go back to the seller and ask for some additional help in sellers credit for those repairs to do myself?
Or, could I ask the sellers for help with covering my buy down interest rate? I am locked in at 5.75% in which I needed to do a 1.5% buy down rate (2.1k). How could I respectfully ask to see if they can either credit me more for repairs or credit me for the buy down rate? Is that something I can even still ask now?
I definitely will appreciate all types of feedback. Thanks!
Hey everyone,
So I am recently under contract for a property that I negotiated from 180k to 175k with 2.5k seller’s credit. I had an inspection contingency where I wanted an inspection but would ask for no repairs.
Pass forward to after the inspection, and I find out that it’s pretty clear. No structural issues or hazards with the property but still definitely some things to fix like grounding wires, rubber roofing, etc. Can I still go back to the seller and ask for some additional help in sellers credit for those repairs to do myself?
Or, could I ask the sellers for help with covering my buy down interest rate? I am locked in at 5.75% in which I needed to do a 1.5% buy down rate (2.1k). How could I respectfully ask to see if they can either credit me more for repairs or credit me for the buy down rate? Is that something I can even still ask now?
I definitely will appreciate all types of feedback. Thanks!
Make sure before you contacting the lender that offer you a mortgage buydown, you call all CU that has a special ARM mortgage rate.
You can always ask. Given you specifically said you wanted an inspection, but would ask for no repairs, the request may not be well received by the seller. It also depends on the local market. Where I am it is still a seller's market.
Lol, you are a very smart girl, first of all, you should find out if the seller is eager to sell the house, if the seller is in a hurry, then these problems are not a problem for you.
You can always ask. Given you specifically said you wanted an inspection, but would ask for no repairs, the request may not be well received by the seller. It also depends on the local market. Where I am it is still a seller's market.
Lol, you are a very smart girl, first of all, you should find out if the seller is eager to sell the house, if the seller is in a hurry, then these problems are not a problem for you.
It is always awkward for new agents to ask for anything semi-non standard. That being said, she works for you, and if you want to relay that request, it's perfectly reasonable. In my experience it would be an ammendment stating something to the effect of "Seller to Pay $XXXX towards buyers rate buy down" (Or whatever specific label your lender uses). Alternatively, you can still request whatever issues want to be fixed resolved, and see what their response is.
A common misconception is that you can only request inspection repairs doing the due diligence period. You can ask at any time before closing, you just don't have the easy out of the contract if the sellers just say no. That being said, the still have a strong incentive to close escrow, and probably don't want to incur the opportunity cost of starting over. One more mortgage payment for them may be the same as just paying what you request. All they can do is say no, and then you decide how to proceed from there. Just asking should nor jeopardize escrow though, so your realtor doesn't have much to be hesitant about.
Lol, you are a very smart girl, first of all, you should find out if the seller is eager to sell the house, if the seller is in a hurry, then these problems are not a problem for you.
It is always awkward for new agents to ask for anything semi-non standard. That being said, she works for you, and if you want to relay that request, it's perfectly reasonable. In my experience it would be an ammendment stating something to the effect of "Seller to Pay $XXXX towards buyers rate buy down" (Or whatever specific label your lender uses). Alternatively, you can still request whatever issues want to be fixed resolved, and see what their response is.
A common misconception is that you can only request inspection repairs doing the due diligence period. You can ask at any time before closing, you just don't have the easy out of the contract if the sellers just say no. That being said, the still have a strong incentive to close escrow, and probably don't want to incur the opportunity cost of starting over. One more mortgage payment for them may be the same as just paying what you request. All they can do is say no, and then you decide how to proceed from there. Just asking should nor jeopardize escrow though, so your realtor doesn't have much to be hesitant about.
Hey, thanks so much. Definitely very helpful information. I think I'll ask the sellers to help contribute to my buydown rate and see how it goes!
Lol, you are a very smart girl, first of all, you should find out if the seller is eager to sell the house, if the seller is in a hurry, then these problems are not a problem for you.
It is always awkward for new agents to ask for anything semi-non standard. That being said, she works for you, and if you want to relay that request, it's perfectly reasonable. In my experience it would be an ammendment stating something to the effect of "Seller to Pay $XXXX towards buyers rate buy down" (Or whatever specific label your lender uses). Alternatively, you can still request whatever issues want to be fixed resolved, and see what their response is.
A common misconception is that you can only request inspection repairs doing the due diligence period. You can ask at any time before closing, you just don't have the easy out of the contract if the sellers just say no. That being said, the still have a strong incentive to close escrow, and probably don't want to incur the opportunity cost of starting over. One more mortgage payment for them may be the same as just paying what you request. All they can do is say no, and then you decide how to proceed from there. Just asking should nor jeopardize escrow though, so your realtor doesn't have much to be hesitant about.
Hey, thanks so much. Definitely very helpful information. I think I'll ask the sellers to help contribute to my buydown rate and see how it goes!
Good luck! Let us know what they say for those of us now invested! lol
Lol, you are a very smart girl, first of all, you should find out if the seller is eager to sell the house, if the seller is in a hurry, then these problems are not a problem for you.
It is always awkward for new agents to ask for anything semi-non standard. That being said, she works for you, and if you want to relay that request, it's perfectly reasonable. In my experience it would be an ammendment stating something to the effect of "Seller to Pay $XXXX towards buyers rate buy down" (Or whatever specific label your lender uses). Alternatively, you can still request whatever issues want to be fixed resolved, and see what their response is.
A common misconception is that you can only request inspection repairs doing the due diligence period. You can ask at any time before closing, you just don't have the easy out of the contract if the sellers just say no. That being said, the still have a strong incentive to close escrow, and probably don't want to incur the opportunity cost of starting over. One more mortgage payment for them may be the same as just paying what you request. All they can do is say no, and then you decide how to proceed from there. Just asking should nor jeopardize escrow though, so your realtor doesn't have much to be hesitant about.
Hey, thanks so much. Definitely very helpful information. I think I'll ask the sellers to help contribute to my buydown rate and see how it goes!
Good luck! Let us know what they say for those of us now invested! lol
I will definitely keep you posted! Any tips I could maybe give my realtor lol
I would have her relay to the sellers that there were several things that you are going to need to fix from the property inspection, and you are not asking them to pay for those things, just the points to get the loan, which I am assuming the contract in financing contingent. This (hopefully) creates some incentive on the sellers part to agree to your request, if they are concerned about dropping out of escrow. Additionally, it demonstrated that you could have asked for more, but are already "Meeting them in the middle".
I would have her relay to the sellers that there were several things that you are going to need to fix from the property inspection, and you are not asking them to pay for those things, just the points to get the loan, which I am assuming the contract in financing contingent. This (hopefully) creates some incentive on the sellers part to agree to your request, if they are concerned about dropping out of escrow. Additionally, it demonstrated that you could have asked for more, but are already "Meeting them in the middle".
OK I literally am drafting something up for my realtor to relay for me. Let me know what you think lol
"Hello, there are several things to fix from the inspection but my client will not be asking for repairs. Instead, my client wants to buy down their interest rate to 5.75% (instead of par at 6.5%) for 1.5% which is 2,100$.
In order to incentivize this deal for my client, would the sellers be willing to pay for the interest rate buydown? My client can close earlier in order for the seller to save on a mortgage payment as well."
Thoughts you guys??
@Christin Nguyen
I’m an investor and agent. Since this sounds like one of your first times purchasing then just state that. Tell them you are not used to any standard procedure and it’s not always common for an agent to talk about “standard” negotiating procedure before locking up a deal. Ignorance or being a rookie is a good enough excuse to ask. You can’t get what you want if you don’t ask. It’s going to be a low chance of getting that request to have seller contribute more because you don’t have much basis to ask for the additional contribution since the inspection turned out good and I’m sure the seller knows they have a good/solid property also. Now you know for next time.
You said your inspection contingency described that you wouldn’t ask for repairs, but you’re not asking for repairs, you are asking for a financial resolution to your findings.
Have your Realtor write up the objection form for your state that outlines your request and submit it. The worst that can happen is that the seller says no.
In the first place, it would be wise to determine whether the seller is motivated to sell the house. If the seller is in a rush to sell, then the issues you mentioned may not be a significant concern for you.
I would have her relay to the sellers that there were several things that you are going to need to fix from the property inspection, and you are not asking them to pay for those things, just the points to get the loan, which I am assuming the contract in financing contingent. This (hopefully) creates some incentive on the sellers part to agree to your request, if they are concerned about dropping out of escrow. Additionally, it demonstrated that you could have asked for more, but are already "Meeting them in the middle".
OK I literally am drafting something up for my realtor to relay for me. Let me know what you think lol
"Hello, there are several things to fix from the inspection but my client will not be asking for repairs. Instead, my client wants to buy down their interest rate to 5.75% (instead of par at 6.5%) for 1.5% which is 2,100$.
In order to incentivize this deal for my client, would the sellers be willing to pay for the interest rate buydown? My client can close earlier in order for the seller to save on a mortgage payment as well."
Thoughts you guys??
Leave the first part out. You said in your offer that you would not ask for anything as a result of the inspection. With that wording, it sounds like you are asking for a discount as a result of the inspection (which you essentially are).
I would have her relay to the sellers that there were several things that you are going to need to fix from the property inspection, and you are not asking them to pay for those things, just the points to get the loan, which I am assuming the contract in financing contingent. This (hopefully) creates some incentive on the sellers part to agree to your request, if they are concerned about dropping out of escrow. Additionally, it demonstrated that you could have asked for more, but are already "Meeting them in the middle".
OK I literally am drafting something up for my realtor to relay for me. Let me know what you think lol
"Hello, there are several things to fix from the inspection but my client will not be asking for repairs. Instead, my client wants to buy down their interest rate to 5.75% (instead of par at 6.5%) for 1.5% which is 2,100$.
In order to incentivize this deal for my client, would the sellers be willing to pay for the interest rate buydown? My client can close earlier in order for the seller to save on a mortgage payment as well."
Thoughts you guys??
Another option is to ask for increasing the sale price by the amount you want the seller to cover for rate buydown. Nothing goes out of your pocket for the rate buydown, seller doesn't lose anything. You can do the math if that small increase in the loan amount is significant or not.
Hey everyone,
So I am recently under contract for a property that I negotiated from 180k to 175k with 2.5k seller’s credit. I had an inspection contingency where I wanted an inspection but would ask for no repairs.
Pass forward to after the inspection, and I find out that it’s pretty clear. No structural issues or hazards with the property but still definitely some things to fix like grounding wires, rubber roofing, etc. Can I still go back to the seller and ask for some additional help in sellers credit for those repairs to do myself?
Or, could I ask the sellers for help with covering my buy down interest rate? I am locked in at 5.75% in which I needed to do a 1.5% buy down rate (2.1k). How could I respectfully ask to see if they can either credit me more for repairs or credit me for the buy down rate? Is that something I can even still ask now?
I definitely will appreciate all types of feedback. Thanks!
Make sure before you contacting the lender that offer you a mortgage buydown, you call all CU that has a special ARM mortgage rate.
@Christin Nguyen
I’m an investor and agent. Since this sounds like one of your first times purchasing then just state that. Tell them you are not used to any standard procedure and it’s not always common for an agent to talk about “standard” negotiating procedure before locking up a deal. Ignorance or being a rookie is a good enough excuse to ask. You can’t get what you want if you don’t ask. It’s going to be a low chance of getting that request to have seller contribute more because you don’t have much basis to ask for the additional contribution since the inspection turned out good and I’m sure the seller knows they have a good/solid property also. Now you know for next time.
Sounds like it’s worth a try to ask and worse case they say no! Definitely a learning experience for my next purchase
You said your inspection contingency described that you wouldn’t ask for repairs, but you’re not asking for repairs, you are asking for a financial resolution to your findings.
Have your Realtor write up the objection form for your state that outlines your request and submit it. The worst that can happen is that the seller says no.
Can you tell me more about this objection form? Is this okay to do anytime during the buying process before the closing date?
Hey everyone,
So I am recently under contract for a property that I negotiated from 180k to 175k with 2.5k seller’s credit. I had an inspection contingency where I wanted an inspection but would ask for no repairs.
Pass forward to after the inspection, and I find out that it’s pretty clear. No structural issues or hazards with the property but still definitely some things to fix like grounding wires, rubber roofing, etc. Can I still go back to the seller and ask for some additional help in sellers credit for those repairs to do myself?
Or, could I ask the sellers for help with covering my buy down interest rate? I am locked in at 5.75% in which I needed to do a 1.5% buy down rate (2.1k). How could I respectfully ask to see if they can either credit me more for repairs or credit me for the buy down rate? Is that something I can even still ask now?
I definitely will appreciate all types of feedback. Thanks!
Make sure before you contacting the lender that offer you a mortgage buydown, you call all CU that has a special ARM mortgage rate.
You said your inspection contingency described that you wouldn’t ask for repairs, but you’re not asking for repairs, you are asking for a financial resolution to your findings.
Have your Realtor write up the objection form for your state that outlines your request and submit it. The worst that can happen is that the seller says no.
Can you tell me more about this objection form? Is this okay to do anytime during the buying process before the closing date?
@Christin Nguyen
First, congrats on getting under contract with your first property.
Your realtor while new, should try to negotiate as best as possible for you. With that said, instead of trying to type what she is to ask the seller's agent, ask her to simply have a conversation with the agent first to see if her client would be amiable to granting that buydown percentage that you need. Then have her formally make the request.
If you're still within your DD period, as others have suggested, if your agent feels strongly that the property will appraise, then have her go on on the sales price and request the buydown amount on the back end. This way you have a win-win for all parties.
You could also see if the Lender has any Lender credits they could offer. Are there any courses that you could complete that could offer you any kind of credits as well.
Forgo asking for help due to repairs if you already said you would not be asking for any. Besides, I'm pretty sure the buydown rate will be more beneficial to you.
You've got this. Happy closing.
Yes, you can still ask the seller for more help in the form of a higher seller's credit for repairs or covering your buy-down interest rate, but you gotta approach the conversation extra respectfully and be prepared to negotiate. The decision is ultimately up to the seller. I'd ask. The worse you can get is a "no".
Don't overthink this. You ask for additional credit for work you "didn't anticipate". Send a list of issues and ask for the full amount of $$$. Hopefully the seller agrees to give you something. If they refuse, then you decide if the deal is still worth it or not. I would not ask the seller to pay towards your loan costs... that has nothing to do with them.
@Christin Nguyen Ask for the seller credit as @Tim P. and @Lydia S. recommended. Consider being a little bold and asking for an amount above what you need. Basic negotiating tactic. Don't go crazy with it. Ask for $3000 and try settling at $2100.
@Christin Nguyen
First, congrats on getting under contract with your first property.
Your realtor while new, should try to negotiate as best as possible for you. With that said, instead of trying to type what she is to ask the seller's agent, ask her to simply have a conversation with the agent first to see if her client would be amiable to granting that buydown percentage that you need. Then have her formally make the request.
If you're still within your DD period, as others have suggested, if your agent feels strongly that the property will appraise, then have her go on on the sales price and request the buydown amount on the back end. This way you have a win-win for all parties.
You could also see if the Lender has any Lender credits they could offer. Are there any courses that you could complete that could offer you any kind of credits as well.
Forgo asking for help due to repairs if you already said you would not be asking for any. Besides, I'm pretty sure the buydown rate will be more beneficial to you.
You've got this. Happy closing.