Basis Point

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What It Means

Basis Points, commonly referred to as “Bips”, are used in finance to refer to interest rates or other percentages. One Basis Point is equal to 0.01%.

Why It’s Important

Understanding the language that financial advisors and some Buyers commonly use is helpful to avoid confusion and misunderstandings in the negotiation process. If a Buyer indicates they are willing to increase their offered rate by 50 “Bips”, that means they are willing to raise the rate by 0.5%.

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