In the days of high inventory and long days on market, their are several things you as a seller can do to entice a buyer to buy your house today. In the mortgage business, we see several different approaches that people take that really have a positive effect on selling a home quickly. One of the best tactics I see regularly is a rate buy down.

Keep in mind that the lender on a home will only allow a home seller to contribute a certain amount (3% for example) towards the buyers closing costs and prepaid costs. Starting with that figure in mind, we as sellers can decide what we are willing to give to the buyer in order to make the deal more enticing. It may cost you $1,000 or more to lower your prospective buyers payment by $75 per month. Sure, $1,000 is a lot of money. Consider, however, that it could help you to sell your house a few months faster by offering to buy down the mortgage rate. Now that $1,000 just saved you a few months of carrying costs and maintenance – well worth the cost!

Buying down a mortgage rate can decrease your buyers payments dramatically. Their are several different kinds of mortgage buy-down programs including those that keep a low rate for 30 years, or those that slowly step the rate back up to par over less than 3 years. Either way, being flexible by offering a rate buy-down to your prospective buyers will help to sell your real estate fast.

I welcome you to post a comment/question below in the comments section.

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It is definitely a good deal.  The main reason that not everyone does it is the 3% Seller Contribution to Closing Costs limit.  Often, other closing costs eat up this allotted amount and the buyer chooses not to spend his own money for the rate buy down (even though it may save him money in the long run!).