Trade price for seller incentives and lower interest rate?

[Yogesh M sayanakar]

Hello I have a simple question- there was a property that went pending for $450 and came back in the market - so my offer price $415k @ 5%/30year fixed interest with 25% down, here the builder is giving 20k towards closing - rate buy down. I was countered $450K at 4.375%/30 year fixed interest with 25% down with 30k in rate buy down money from builder. Both are somewhat equivalent in monthly PI(more or less), so I'm considering increasing my Down payment to 27% and counter at $425k at 4.375% down using all the seller incentives but anchoring on a lower cost and increasing my down payment by 2%.. which is making the most from seller incentives. My counter gives me a chance at $300+ cash flow conservatively on a brand new SFH in a growing area.

Appreciate the thoughts from the pros on this. 

[Dustin Allen]

@Yogesh M sayanakar

The builders have huge incentive to get their purchase price even if they give away way too many credits/incentives. The purchase price is what will guide future purchases and they want to protect that at all costs.

From your perspective, lower rates and concessions are good and might be the best in the end. Just remember, you can refinance the rate later on if rates go down in the future. You never get another chance to lower the purchase price once you’ve bought the property.

Sounds like you might have found a happy medium and that’s what negotiation is all about. If the numbers work out for you in the end, then go for it.