When To Use The Seller Buy Down Strategy

The Seller Buy Down Strategy is most effective in a rising interest rate environment.  When interest rates rise, fewer buyers can qualify for the higher payments associated with the purchase of a home.  Interest rates hit historic lows in 2010 and will most likely rise in the coming months and years.  As a result, the monthly payments required for the same purchase price will also increase.   

The Seller Buy Down Strategy allows the buyer to use the seller's funds to buy down their interest rate and lower their monthly payments. 

The Seller Buy Down Strategy must be employed when you are making your offer to the seller, NOT after the offer has been accepted.  Therefore, a smart buyer must work with a smart mortgage company to help custom tailor their purchase offer to their loan.  A home loan is not independent of the purchase offer.  A smart buyer knows that the home loan and the offer must work in hand in hand.  

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