Seller Buydown Strategy with Drew Carls

In short, it allows for a seller to keep their home at list price and offer to pay some of the buyer’s closing costs. For the buyer, it allows them to buy their interest rate down and allows them to qualify to purchase the seller’s home.    

Realtors, before you reduce your list price, here is a strategy that can be a win-win for both buyers and sellers! Consider changing your marketing to “The seller will pay up to $10,000 of the buyer’s closing costs or pre-paids,” or “Special seller financing options,” or “Seller will buydown the buyer’s interest rate.” 

Column 1: Home is listed for $500,000.    

Column 2: A $20,000 price reduction lowers the buyer’s monthly payment by $95/mo and reduces their cash to close $4,119.     

Column 3: The seller offers instead to pay $6,000 of the buyer’s costs. This saves the buyer $127/mo on their mortgage payment and $29,188 in interest over the next 15 years.    

Column 4: The seller offers instead to pay $8,000 of the buyer’s costs. This saves the buyer $189/mo on their mortgage payment and $43,638 in interest over the next 15 years.