By Marissa Sainz, May 23, 2023
I get a lot of questions when a buyer or seller is negotiating a price reduction vs a credit. These two options look very similar for a seller, but can be very different for a buyer. Let’s use the example of a $500,000 house for sale.
A price reduction is the seller lowering the price they will accept on their home for a buyer. For example they will accept $490,000 instead of $500,000. For the seller this reduction takes away from the net proceeds they will receive at closing.
For a buyer this reduction will reduce their monthly mortgage payment. The amount will vary depending on interest rate. Buyers that are sensitive to their monthly mortgage payment may choose this route.
A seller credit is the seller offering to pay for a portion of a buyer’s closing costs. For example they accept the full sale price of $500,000 and will contribute $10,000 towards the buyer’s closing costs. For the seller this reduction takes away from the net proceeds they will receive at closing.
For a buyer this credit will reduce the amount of cash they have to bring in at closing. If a buyer’s down payment is $50,000 and their lender/title/pre-paid closing costs are $10,000 they will only need to bring in $50,000 instead of $60,000 at closing. Buyers that would like to keep cash on hand after closing (most of the time for repairs or updates) may choose this route.
Have more questions? Reach out at marissa@livingroomre.com
Marissa Sainz
Broker | Earth Advantage | OR
She/Her
Whether you want to live in a hip Pearl District condo or a unique east side bungalow I am here to help you find the perfect home.
The Pearl District and the close in surrounding neighborhoods are exciting and evolving areas and where I focus my business.
It is important in our changing real estate world, where location is so vital to home buyers, to work with a neighborhood expert. We all want to live near our local grocery store and within walking distance of our favorite coffee spot, restaurants and parks.
I am here to guide buyers and sellers through the process every step of the way, if you are a first time home buyer searching for the perfect starter home or looking to move as your family and lifestyle change.
Marissa earned a degree in finance with a concentration in real estate from The University of Texas at Austin. Before coming to residential real estate in Portland Marissa worked for both a national and local commercial real estate firm. Around town Marissa is involved with the Women in Insurance and Financial Services Portland chapter as well as the Women's Council of REALTORS®.
Read More