Omitting Seller-Paid Points
Want to know why many real estate Web sites — never good at estimating home prices — are off by at least another 3% now?
Because Seller-paid points are a fixture of many house deals these days, yet the government data that many real estate sites rely on don’t report that.
Instead, Hennepin County and most others only disclose the gross amount of the sale.
But ask yourself this:
If a home sold for $300,000, but the Seller agreed to pay $10,000 of that towards the Buyer’s closing costs, isn’t the sales price really $290,000?
Of course it is.
But the only place that that’s disclosed is on MLS, and only then if you select what’s called the “Property Agent Full” report (unabridged).
You’d certainly guess that most of the real estate sites aren’t going to nearly that trouble.
In the rental market, landlords are infamous for holding firm on their per square rental rates, but periodically throwing in concessions — like one or two months’ free rent — that clearly reduce the tenants’ effective rate.
Are Seller-paid points just about posturing?
I’d argue “no,” because that money is actually transferred from the Seller to the Buyer.
Especially in a slow economy, helping cash-strapped Buyers cover their closing costs can be the difference between a deal and no deal, especially in the housing market’s lower rungs.