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In reference to a loan, seller's points consist of a lump sum paid by the seller to the buyer's creditor to reduce the cost of the loan to the buyer. This payment is either required by the creditor or volunteered by the seller, usually in a loan to buy real estate. Generally, one point equals one percent of the loan amount.
A lump sum that the seller of real estate pays to the lender that finances the transaction for the buyer. Seller's points are part of the seller's closing costs and are used to make the loan less expensive for the lender. Seller's points are usually made when the seller needs to rid himself/herself of the property in short order and wants to encourage the lender to qualify the buyer. Most of the time, one point equals 1% of the amount of the loan.