Posts Tagged ‘seller pay points’

Why Choose a REALTOR

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There are many different Business Models in the Real Estate Industry. Here’s just a few examples:

1. Buyer Only Brokers.

2. Buyer Rebate (Kick Back) Brokers.

3. Virtual Office Brokers. No physical location.

4. Reduced Commision Brokers.

5. Fixed Price Brokers.

6. Transaction Facilitation Brokers.

Etc, etc.etc ad infinitum.

All of these and many more are proof that we have a lot of competition in our business, and that the Consumer (Buyer or Seller) has lots of choices.

I won’t try to explain the pro’s and con’s of any of these options, but will strongly suggest that whichever of them you choose you  strongly consider working with a REALTOR.

My reason for this specific advice is as follows:

1. There are more than Half a Million Licensed Real Estate Agents in California. This is the minimum required qualification for the job.

2. Only 165,000 of them are REALTORS who have voluntarily agreed to subscribe to a strict Code of Ethics, and are paying members of their Local, State, and National Associations of Realtors.

Amongst many other services Realtors provide to the public is the web site Realtor.com. the most popular of all on-line Real Estate sites. Check out http://www.realtor.com/.

Seller Paid Points Buydown.

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Here’s an excellent way to help your Sellers get it sold in a competetive market, and to show your Buyers how to maximize the loan amount they qualify for.

The “Seller Financed Rate Buydown” is back better than ever.

Rather than telling your Sellers they need to drop the price (yet again) try making the property more affordable to potential Buyers.

Offer a “x”% Seller paid Credit to the Buyer to be used as points to reduce the mortgage interest rate. Here’s an example:

Contract price $500,000

Loan amount $400,000

Interest rate with zero points 6.0% giving a payment of $2,398/m.

Interest rate with 3 points 4.75% giving a payment of $2,087/m.

Monthly savings equals $311/m.

Over 5 years this would be $18,660.

Over 30 years this would be $111,960.

By increasing a potential Buyers borrowing power you have made your listing more affordable to a substantial number of Buyers who would not otherwise have been able to qualify to buy it.