Why seller credits matter more than price

[Amber Stout]

Hi all, something I've been seeing repeatedly in today's market is many buyers who are financing are focused on the wrong number.

They're negotiating aggressively on purchase price while completely ignoring the offer/ financing structure.

For example, a seller willing to give $10,000 in concessions may create significantly more value than a $10,000 price reduction depending on the loan program and buyer's goals.

I recently worked with a house hack buyer who actually increased the sales price, negotiated 6% seller concessions, and used those credits to cover closing costs and a huge buy down on the interest rate.

This resulted in less cash out of pocket and a much lower monthly payment.

Seller concessions can potentially be used for: closing costs, interest rate buy downs, preserving liquidity. 

For investors especially, keeping cash available or creating higher cash flow often creates more long nterm value than squeezing every last dollar out of the purchase price.

Curious what other investors and agents are seeing right now:

If a seller gave you an extra $10,000, would you rather use it for:

1. Price reduction
2. Closing costs
3. Rate buydown
4. Something else

[Aaron Zimmerman]

Agreed. To me, I prefer to put less cash out of pocket. If I knew we'd stay there a while, I'd consider buying down the rate.