With fewer buyers vying for the same home, you are likely to be the only one making an offer on the home your prefer. So with this lack of competition, comes, in most cases, the ability to negotiate concessions from the seller, or even your real estate agent! For instance, if you were to purchase a home in Woodland for $650,000.00 and put 20% down, your loan amount would be $520,000.00. Today’s 30 year fixed rate at no points would be in the mid sixes, but lets use 6.5% for the sample. If the seller agrees to concessions of $11,835.00 that would buy down your rate to 4.50% for the first year and 5.50% for the second year, then fix at 6.5% for the remaining 28 years. If rates go down in that first two year period, or shortly after the two year period is over, then you can always refinance to the lower rate! If rates go higher, you at least know you will never be higher than 6.50%! The first two year period will see you making $11,835.00 less in payments – that is quite the savings! If you have questions for yourself or a friend regarding the use of concessions in a real estate purchase transaction, give Michael Mitchell a call at 503-406-2200, 707-259-1117, or 707-337-5970 Cell!
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