What’s Up With Down Payment?

When it comes to negotiating the terms of a deal, gathering information is key. The more you know about the other side’s position – as well as what they want –
the more effective and successful you will be . The following article provides valuable information to buyers regarding down payment and WHY it is important to many sellers.

Unreal Estate

I am often asked by buyers, “Why does the seller care about my down payment amount? As long as I am satisfying the building’s down payment requirement, and the bank has approved the loan, aren’t they getting their money at the closing table whether I ‘put down’ 20%, 50% or 100%?”

It is a very reasonable question. Unfortunately, the answer is more complicated than you might think. 100% of the purchase price will certainly be delivered at the closing whether the bank is providing 8% or 80% of the funds. However, the seller being “made whole” is only one small piece of the puzzle and doesn’t take into account two major factors in any purchase – risk and competition.down-payment

In every deal, both the buyer and seller assume some amount of risk. Of course, each would rather the other take the majority of the risk, and both sides will do their…

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