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Closing Credit Bridge Calculator
Seller closing credits change effective price. This calculator bridges the math.
Effective net price
$1,228,000
Buyer cash to close
$23,000
Total credits
$27,000
How the math works
Effective price = purchase − seller credit. Buyer cash = closing costs − lender credit.
Seller credits preserve headline price for neighborhood comps but quietly shift value to the buyer. On portfolio acquisitions, ask for credits itemized separately in PSA — the accounting detail matters for both basis tracking and depreciation planning at the asset level.
How to Use
- Enter purchase price.
- Enter seller closing credit.
- Enter buyer closing costs.
- Enter lender credit.
- Read effective net price.
Frequently Asked Questions
Why use credits?
Maintains headline price for comp purposes. Reduces buyer out-of-pocket at closing. Can fund repairs, rate buy-downs, or prepaid items. Common in slow markets where sellers offer concessions.
Lender caps?
Most lenders cap seller credits at 3-6% of purchase depending on loan type and LTV. FHA: up to 6%. Conventional: 3-9% by LTV. VA: 4%. Excess credits reduce financed amount.
Tax impact?
Buyer: reduces basis (less to depreciate). Seller: reduces selling price for gain calculation. Both parties benefit from reporting carefully — misreported credits trigger IRS scrutiny.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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