Sellers need to put work into selling their homes again, which usually translates into money out of their pockets.

When you’re going through the negotiation process, the buyer’s first instinct will be to ask for a lower purchase price. However, that may not be the best move for anybody. As the savvy seller you are, you won’t accept that. Instead, offer the buyer a buydown. It will save them more money in the long run and can net you more money as well.

What Is A Buydown?

With a buydown, home buyers are able to buy themselves a lower interest rate which is excellent news since rates have increased at an alarming rate in the last few months. A buydown can make the buyer’s monthly mortgage payment more affordable and also save them tens of thousands of dollars over the life of their loan.

How Much Will A Buydown Cost Me?

A buydown of one point costs one percent of the home’s purchase price, but the amount you contribute to a buydown is entirely up to you. The strategy here is to offer this option only after the buyer has thrown an offer at you that you aren’t willing to accept.

Let’s say your home is listed for $600,000. The buyer offers you $580,000, which is a no go for you. Instead of going back and forth trying to convince them to increase their offer, you could counter back with the original $600,000 listing price, but you’ll give them $14,000 for a buydown.

Now, we’ve said it before – not all Realtors are equal, and some may be confused as to why this would benefit their clients. Don’t worry; we’ll explain it to them so they can convince their client of the benefits of this offer. Basically, if you knocked $14,000 off the home’s purchase price, the buyer would save a couple of bucks monthly on their mortgage payment – which is great. However, if they used that money to buy discount points or do a buydown, they’d save far more.

That $14,000 buydown would reduce their monthly mortgage payment by about $100 per month and over $60,000 over the life of the loan. How can they pass that up?

With this negotiation tactic, you will net about $4,000 more than you would have if you just accepted their initial offer. A true win-win situation!

Do You Have More Questions? We have more tricks up our sleeves that will get you more money for your home. If you’re ready to sell your house, give us a call