Buyer Offer Gap Calculator: Close the Gap
Your buyer can pay less than the seller wants. Enter the seller's number and what your buyer can pay, cash and loan. See the offer at which the seller, using a structured installment sale, nets the same as the seller's number in cash, whether the gap closes, and a line you can use with the listing agent. Your buyer's side does not change: a bank loan plus cash, same closing. Playbook: Close the Buy.
By Hans Goldstein, EA · Updated October 14, 2026 · Tax figures: 2026 federal brackets (IRS Rev. Proc. 2025-32) and the 3.8% net investment income tax
Your buyer's gap
Your buyer can pay $9,500,000 (cash $3,000,000 + loan $6,500,000). The seller's number is $10,000,000. The gap is $500,000.
The gap closes. Your buyer's $9,500,000 is $216,933 above it, so the seller nets at least what $10,000,000 in cash would net.
Does the gap close?
- Seller's number, all cash: seller nets$4,882,832
- Buyer's $9,500,000 all cash: seller nets$4,585,975
- Buyer's $9,500,000 with a structured sale: seller nets$5,028,117
- Gap you started with$500,000
- Gap left after a structured sale$0
Structure used: 10 level yearly payments at a 5% payout rate (an assumption, not a quote; set on October 14, 2026, the real rate depends on the carrier and the term on the day of the sale), no cash taken at closing beyond the loan payoff, closing costs of 5% commission + 0.5% escrow and title + the state transfer tax estimate. The section 453A interest charge applies above $5,000,000 of installment obligations and is already inside the structured figures: $52,629 over the schedule.
Your buyer's side does not change
- Buyer's cash at closing$3,000,000
- Buyer's bank loan$6,500,000
- Price paid, all at closing$9,500,000
- Loan-to-price68.4%
- Payments from the buyer to the seller after closing$0
- Note, lien or subordination from the sellerNone
The buyer's side does not change. It is a bank loan plus cash, paid through escrow on the same closing date. The lender sees a normal loan in first position. The seller is paid by the structure, so nobody negotiates a rate, a balloon date or a second lien.
Your buyer has room: with the same loan, $2,783,067 in cash reaches the break-even price of $9,283,067. That is $216,933 less cash than the buyer is putting in now.
A line for the buyer's agent
"Your seller wants $10,000,000. My buyer pays $9,500,000, all cash at closing: cash plus a normal bank loan, same escrow, same closing date. If there is a way for your seller to keep as much as at $10,000,000, would they take it? There may be more than one way to get paid for this sale. I can introduce you to Hans Goldstein, EA. Want the intro?"
Say it as a question to the listing agent. Do not explain tax or give advice; the introduction is the ask.
Get the REAL numbers
Talk to real estate deal tax expert Hans Goldstein, EA
Why now: a structured installment sale has to be set up before closing. Once the money reaches the seller or an intermediary it cannot be restructured.
These are estimates. Have a qualified tax professional run your real numbers in a 15-minute scope call.
Book my 15-minute callThis is an estimate. Getting it right down to the tee takes your actual tax forms (returns, K-1s, depreciation schedules), a consult and a paid analysis. The first 15-minute scope call is free.
How the close-the-gap calculator works
Your buyer can pay $9,500,000: $3,000,000 of cash and a $6,500,000 bank loan. The seller says $10,000,000. That is a $500,000 gap, and on price alone the deal is dead. But "firm on price" usually means firm on what the seller keeps. For a seller with a large gain and a long hold, a good part of the price goes to tax. A structured installment sale lowers that tax bill, so the seller can keep the same amount from a lower price.
The calculator finds the offer at which the seller, using a structured installment sale, nets the same as the seller's number in cash. If your buyer's number is at or above it, the gap closes. It also shows what changes for your buyer: nothing. Same bank loan, same cash, same closing date. The buyer pays the full price at closing through escrow, makes no payments to the seller afterward, and there is no note, lien or subordination to negotiate.
You will not know the seller's numbers. Here is what it assumes
The seller's basis, depreciation and loan payoff are the seller's private numbers. Leave them blank and the calculator uses labeled assumptions: basis at 40% of the seller's number, depreciation estimated from 15 years of straight-line on a commercial building with 40% land, and a loan payoff at 25% of the seller's number. Each assumption is printed in the result, in a box that says it was assumed. Replace them as you learn the real numbers, or ask the listing agent for a rough basis.
Worked example: a $10,000,000 seller's number, computed October 14, 2026
A California couple, $200,000 of other income, 5% commission, ten level yearly payments at an assumed 5.0% payout rate. With the assumed basis of $4,000,000, depreciation of $1,195,670 and a loan payoff of $2,500,000, the break-even offer is $9,283,067. Your buyer's $9,500,000 is $216,933 above it, so the gap closes. At the buyer's number the seller nets $5,028,117 with a structured sale, against $4,882,832 all cash at $10,000,000.
Because the basis is a guess, here is the same deal at three different bases. The higher the basis, the smaller the gain and the less room there is:
| If the seller's basis is | Depreciation taken (estimated) | Offer that nets the seller $10,000,000 in cash | Your buyer's $9,500,000 |
|---|---|---|---|
| 20% of the price ($2,000,000) | $597,835 | $9,034,732 | closes, $465,268 above it |
| 40% of the price ($4,000,000) | $1,195,670 | $9,283,067 | closes, $216,933 above it |
| 60% of the price ($6,000,000) | $1,793,505 | $9,586,586 | short by $86,586 |
What to say to the listing agent
Ask one question, then make one introduction. You do not explain tax or give advice.
- "Firm on price usually means firm on a net. What does your seller need to walk away with?"
- If the seller has a big gain and a long hold: "If we hit that net at a lower price, does it close?"
- Then: "There may be more than one way to get paid for this sale. I can introduce you to Hans Goldstein, EA. Want the intro?"
The Close the Buy playbook for buyers and buyer's agents has the scripts for email, text, call and voicemail, the objections, and what to tell your lender.
The first 15-minute scope call is free. If the seller wants the written numbers and documents, the analysis is $5,000. Only the scope call is free.
How Hans is paid. Hans Goldstein, EA, is also a licensed insurance agent. A structured installment sale is funded with an annuity, so he is paid a one-time commission from the insurer only if a seller chooses one, built into the payout rate. He earns nothing from a cash sale. That is a conflict of interest, which is why every option is shown side by side and the seller's CPA and attorney review everything.
When the gap does not close
If your buyer's number is under the break-even, the calculator shows how far under and how much more cash the buyer needs with the same loan. If the seller has a small gain, or a large loan payoff that is taxed in the year of sale, or an obligation over $5,000,000 that carries the section 453A interest charge, a structured sale may not net the seller the same, and the calculator says so plainly.
What the calculator assumes and does not do
- Estimates. Federal and state income tax and the 3.8% net investment income tax, figured by the same engine as our other calculators, with 2026 federal law held flat for later years (IRS Rev. Proc. 2025-32).
- Depreciation is treated as real property depreciation (taxed up to 25%). Equipment and cost segregation items are taxed higher and are not split out here.
- Not modeled: suspended passive losses, capital loss carryforwards, a 1031 exchange, state-specific special deductions, and anything the seller has already sold this year.
- The structured amount must be at least $100,000. Below that a structure cannot be placed, and the calculator says so.
- It is set up before closing. Once the money reaches the seller or a qualified intermediary, it cannot be restructured.
- The seller's payments are locked in. No speeding them up, borrowing against them or cashing them out. They depend on the assignment company's ability to pay; it is usually funded by a fixed annuity from a highly rated life insurer whose name and ratings are disclosed in writing before anyone signs.
- Net in today's dollars. The structured payments and the tax are both valued at the payout rate, so a structured net and an all-cash net can be compared on one line.
The rules the calculator applies
| Rule | What the calculator does | Source |
|---|---|---|
| Installment method | Gain is taxed as payments are received, in the gross profit ratio; a loan paid off at closing is a payment in the year of sale | IRC 453; IRS Publication 537 |
| Interest charge over $5,000,000 | On installment obligations over $5,000,000 at year end, interest runs on the tax not yet due. The calculator charges it at the IRS underpayment rate, 7% for the third and fourth quarters of 2026 | IRC 453A; IRS quarterly interest rates |
| Federal rates | 2026 brackets and capital gain rates: 0%, 15%, 20%, and up to 25% on unrecaptured depreciation on real property | IRC 1(h); IRS Rev. Proc. 2025-32 |
| Net investment income tax | 3.8% on the gain above the income threshold | IRC 1411 |
| State tax | Each state's 2026 income tax schedule as built into the Goldstein & Co. engine, read October 14, 2026; transfer tax by state from the engine's table | State revenue department rate tables |
| Payout rate | 5.0% a year, an assumption set October 14, 2026, used both to size the payments and to value them in today's dollars. The real rate depends on the carrier and the term | Assumption, not a quote |
All sources read October 14, 2026.
Buyer Offer Gap Calculator questions
What does "close the gap" mean here?
Your buyer can pay less than the seller wants. The gap closes if the seller, using a structured installment sale, nets the same from your buyer's number as from the seller's number in cash.
What changes for my buyer?
Nothing. The buyer pays cash plus a normal bank loan at closing, through escrow, on the same date. The lender sees a normal loan in first position. There is no seller note, no rate or balloon date to negotiate and no payments to the seller afterward.
How do I know the seller's basis?
You usually do not. The calculator uses labeled assumptions until you learn it, and the article shows the result at three bases. Ask the listing agent for a rough basis, or send the deal to Hans before closing.
Is this a seller carryback?
No. A carryback makes the seller a lender to your buyer. Here the buyer pays everything at closing and the seller is paid by the structure.
What if the gap does not close?
The calculator shows how much more the buyer needs. The seller may have a small gain or a large loan payoff, in which case a structured sale does not net as much and this gap will not close on the seller's side.
What does it cost?
The calculator and the first 15-minute scope call are free. The written analysis is $5,000. Hans is paid a one-time commission from the insurer only if the seller chooses a structured sale.
Sources
- IRC 453, installment method: Cornell LII, read October 14, 2026
- IRC 453A, interest on tax not yet due, obligations above $5,000,000: Cornell LII, read October 14, 2026
- IRC 1(h) and 1411, capital gain rates and the net investment income tax: Cornell LII, irs.gov
- IRS Publication 537, Installment Sales (buyer pays off a mortgage, contract price, gross profit): irs.gov
- IRS Rev. Proc. 2025-32, 2026 brackets, standard deduction and capital gain breakpoints (October 2025): irs.gov
- IRS quarterly interest rates, underpayment rate 7% for the third and fourth quarters of 2026: irs.gov
Related: Sell for less, net more calculator (brokers) · Fund the full loan calculator (lenders) · For professionals · Broker price-room tool · Structured installment sale calculator · All calculators
Educational estimate only, not tax, legal or investment advice. Federal and state income tax and the 3.8% net investment income tax; figures use 2026 federal law (Rev. Proc. 2025-32) held flat for later years. The payout rate is an assumption, not a quote. Your CPA should confirm any number before anyone acts on it. Hans Goldstein, EA.