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Still the BEST Strategy!

As we move into another holiday season and a new presidential administration, home buying is still a bit challenging. Buyers are struggling with monthly payment which has been generated by higher prices coupled with higher interest rates. It has made for a conundrum that has been hard to swallow. However, FEAR NOT! 


I put together Seller Buydown Comparisons for my realtors and their home listings. I just completed another one this morning for an average priced home in Bozeman coming on the market. It is always mind-boggling to me just how EFFECTIVE using Seller Credit to buy down the interest rate is compared to reducing the purchase price.


Take a look at this:

If a buyer negotiated the price down from $730,000 to $700,000, it would only drop their payment by $153.42/month and would cost the seller $30,000. 


Instead, if the buyer negotiated a 2% of the purchase price seller credit and used it to buy down the rate to 5.573%, that would drop the payment by $390.56!!!! This strategy only costs the sellers $14,600. 


For comparison, in order for the buyer to have that same payment as the Rate Reduction column, the seller would have to drop the price by over $76k!!


Strategies like this are putting buyers into homes faster than the "just wait until rates drop" strategy. Yes, rates are forecast to come down eventually but we are not guaranteed a timeline. There are a lot of conjectures as to when this might happen but nothing certain. What IS certain is that when rates do drop, all the buyers that have been waiting on rates will flood the market, increasing demand on houses, which will force prices up. 


If you would like to talk further about this strategy for you as a buyer or for your buyers as a realtor, please reach out! And if you know of anyone looking to buy or refinance a home, would you send them our way? We would love to help any of your friends or family get into a home or make their existing one more affordable!


Talk soon

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