Posts from March 31st, 2026
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What is More Beneficial? A Price Reduction or Seller Credit?
I believe most buyers, in their negotiations, actually negotiate the wrong thing when making an offer to purchase a home. I'll explain...
If you ask for $12,000 off the purchase price of a $600,000 home, you will only reduce your monthly payment by about $72. That's it! Seventy-two dollars.
If you ask for a $12,000 seller credit and use it to buy down the interest rate, you can reduce your monthly payment by $195. Same $12,000. Almost three times the impact.
Here is why the math works out this way.
A $12,000 price reduction on a $600,000 home only drops your loan amount from $570,000 to about $558,600. Spread that over 30 years at 6.5%, and the monthly amount is barely noticeable.
But putting that same $12,000 applied as a seller credit towards buying down your rate drops you from 6.5% to roughly 6%. On a $570,000 loan, that small rate difference saves you almost $200 every month. Over the life of the loan, that's over $70,000 in total interes...
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