Seller Buy Down
As interest rates increase, many Buyers are feeling the pinch of potentially higher payments. At the same time, Sellers are waiting for Buyers to place offers and are feeling the pressure to adjust their list prices. As a Seller, consider buying down the interest rate for a prospective Buyer. A simple Seller credit to the Buyer that can be used to buy down the Buyer’s interest rate can produce significant monthly savings for a Buyer. For example, the difference between a $600,000 mortgage (principal and interest) at 5% for 30 years, and a $600,000 mortgage at 4.5% is almost a $200 per month savings. This savings will help to bridge the gap and may be the key to getting the property sold. The typical cost is 2.00 points for a 1/2% buy down, so in the example above, the cost would be $12,000 to the Seller. As a Buyer, when negotiating a purchase, consider asking for Seller credits as opposed to a lower price. The credit will result in a lower payment and more savings over time!