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The difference between $1000 and $7.29

Most buyers think by saving $1,000 off the asking price, they're actually saving $1,000.

This isn't entirely true. 

As a buyer you're most likely financing between 70% and 80% of the purchase price.   At an 8% interest rate you only take $7.29 out of your pocket per month for every $1000 you add to your mortgage. That means it would take 137 months or 11.43 years for you to take $1,000 out of your pocket. Most people don't own their homes for 11.43 years.

Now, as a Seller, for every $1,000 you come down in price it's exactly $1,000 out of your pocket.

The difference between $1000 and $7.29 is the single most misunderstood concept of real estate negotiations.

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