Real Estate Math
A buyer negotiates a seller credit of $8,000 at closing for needed repairs. The agreed sale price is $385,000. The lender will base the loan on:
A$393,000 (sale price plus credit)
B$377,000 (sale price minus credit)
C$385,000 (the contracted sale price)
DThe lower of appraised value or $385,000✓ Correct
Explanation
The lender bases the loan on the lower of the appraised value or the contracted sale price ($385,000). Seller credits are an adjustment at closing — they reduce the buyer's out-of-pocket closing costs but do not change the purchase price for appraisal or loan purposes.
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