A buydown, specifically a ‘2-1 Seller-Paid Buydown’ is an amazing buyer and seller negotiating strategy in a real estate market that is neutralizing. 

What is a ‘Seller-Paid 2-1 Buydown’?

A “Seller-Paid 2-1 Buydown” is where a seller pay a fee at the closing to reduce the interest rate on the buyer’s mortgage by 2% in year 1 and 1% in year 2. This results in temporarily lowering the buyer’s monthly payment and making the home more affordable for them.

What are the benefits of a 2-1 Buydown?

A 2-1 Buydown reduces the buyer’s interest rate and monthly payment during the first few years of homeownership, making the home more affordable for them.

It has a much greater impact on the buyer’s monthly payment than reducing the list price of the home.

This could be a great negotiating tool because a greater percentage of homes listed for sale in today’s market are seeing price reductions. A 2-1 buydown makes a listing more affordable to a wider range of buyers who may have otherwise been priced out of the market.

How does a 2-1 Buydown give a seller a competitive advantage?

When a seller offers to pay for a 2-1 buydown for a homebuyer it could give their home for sale a competitive advantage vs. other homes listed for sale in today’s changing market. This is because interest rates have gone up significantly this year, creating an affordability crisis for many potential buyers.

A 2-1 buydown could also save you the aggravation and financial loss of having to significantly reduce your list price in order to compete with other homes that may be listed for a lower price.

Let me know if you’d like for me to run some numbers to see the specific impact that this strategy could make in your situation!

Kevin Martini, mortgage lender Raleigh

3 Buydown options offered by the Martini Mortgage Group

For more information about Seller-Paid Buydowns tune into the Martini Mortgage Podcast

The Martini Mortgage Group at Gold Star Mortgage

The Martini Mortgage Group is located at 507 N Blount St, Raleigh, NC 27604 and helps families in every county in North Carolina.