What is the amount of points paid by the seller when a property sold for $240,000 and a buyer financed the remaining balance after a $50,000 down payment?

To determine the amount of points paid by the seller, we first need to understand what points are in the context of real estate financing. A point is typically equal to 1% of the loan amount, and it may be paid by the seller to lower the buyer's mortgage rate, making the loan more attractive to the buyer.

In this scenario, the selling price of the property is $240,000, and the buyer makes a down payment of $50,000. Thus, the remaining balance that needs to be financed by the buyer is calculated as follows:

Remaining Balance = Selling Price - Down Payment

Remaining Balance = $240,000 - $50,000

Remaining Balance = $190,000

To find the amount of points that the seller pays, we need to assess how many points they are responsible for, generally assessed as a percentage of the financed amount. While the question does not specify the percentage of points, if we assume the seller pays 1 point (which would be common in many transactions), the calculation is as follows:

Points Paid = Loan Amount x Percentage of Points

Points Paid = $190,000 x 1%

Points Paid = $1,900

Thus, the amount of points paid by the seller