A Selling and Negotiating Strategy for Sellers

Here's a great strategy just sent to me today:

This rate buy down strategy will help sell your listings faster and help you respond to that low ball offer. A strategy that will make you shine above the rest and solidify the close of escrow

Should you reduce your sales price or should you reduce your Buyer's interest rate?

Monthly Obligation

1. Did you know that Price Reduction of $20,000 on your listing will save the buyer 103.00 per month?
2. The same $20,000 in buying down the interest rate will save the buyer $541.00 per month!

Qualifying

1. Did you know a buyer of your $450,000 listing needs $96,000 in income to qualify for the loan.
2. Did you know a buyer of your reduced $439,000 listing needs $94,200 in income to qualify for the loan.
3. Did you know that if you took that same $11,000 dollar reduction and paid down the interest rate, that listing needs only $74,400 in income to qualify for the loan.

Listing Scenarios:

Listing One-Listing Price $750,000.00--DOM=120, Payment=$3,453.00.

Price Reduction to $725,000--Payment=$3338.00, DOM=130.

Listing Two-Listing Price $750,000.00 and effectively reduced with a seller interest rate buydown. (Interest Rate Buydown Cost $12,750.00 to $19,125.00) DOM-?, Payment $2,922.00 , Sold! Saving the buyer over $45,000.00 in five years.

Listing One (Reduced)-Down Payment ($108,725.00) and Loan Closing Costs ($9,000.00) = $117,750.00 at the closing table.

Listing Two - Down Payment = $112,500.00 at the closing table. Loan Cost paid by sellers.

Listing One- Income Needed- ~$98,000.00

Listing Two- Income Needed- ~$87,000.00

Listing Two, with a buy down strategy, saves the buyer over $45,000.00 in five years and over $95,000.00 in ten years.

For more information on selling, contact:

Julia Huntsman, Broker Associate, e-PRO®, REALTOR®
All California Brokerage, Inc. 562-896-2609

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