Real estate markets are like snowflakes, no one is exactly the same. The one thing they do have in common is that with each new year comes the expectation that there is some new strategy to gain more buyers and sellers. In reality, we need a good old-fashioned consultation and an understanding of what tools we have in our toolbox. Then we can use those tools to gain trust, confidence and ultimately more business.

The saying, “What’s old is new again,” certainly applies here — but what can be new is the way these tools are discussed, positioned and tailored to meet the needs of the individual client and current market conditions. One of those tools is the interest rate buydown — either temporary or permanent. Let’s discuss the temporary option.

A temporary buydown is one in which the borrower receives a reduced mortgage rate and payment for some time (1, 2 or 3 years) by means of prepaying that difference in interest costs. Traditionally, the buyers would request this from the seller as a closing cost credit to cover the needed funds. This is still a viable option, especially if the listing has been stale and the seller hesitates to lower the price. A new take on this could be a lender-funded buydown, an option that can be built into the rate to cover the cost of the buydown. This leaves the seller off the hook but provides the buyer with a reduced interest rate without them footing the cost.

The short-term benefits are significant. It allows the buyer to make that offer now and obtain a lower monthly payment without using any of their own funds. For those anticipating a drop in rates over the next 12-18 months, this could be a perfect option that provides them with a lower monthly payment and peace of mind, making the decision to move easier.

It’s important to know that there is no one-size-fits-all solution, but what resonates with all clients is the idea of choice and knowing that their team of real estate and mortgage professionals take the time to understand what is important to them and provide options that allow them to make the best decision.

By teaming up with your Key Mortgage loan officer, you can leverage their knowledge and experience to help you connect with your potential buyers AND sellers, giving them options that help them see the path forward that suits their needs in today’s market. Reach out today to strategize how you can implement this into your buyer and seller consultations today.