Typically, this situation takes place when the seller is in a rush to sell the property or has had issues finding a buyer.
Buyers can use seller's points to pay for prepaid costs, mortgage interest or temporary rate buydowns.
[3] This means that if you have money in savings that you must retain, you could ask the seller to pay for a 1 to 2 percent interest rate reduction for a year or prepay your interest, homeowner’s association fees or homeowner’s insurance for a set period.
That would give you time to replenish your savings account for the money you used at closing and maintain your 3.5 percent equity investment in the property.
[4] If a buyer is planning to use savings to pay for closing costs, discount points or rate buydowns, the cash can apply to a down payment instead.