We'll Pay You to Buy This House!

The market has changed... No news there - the whole world knows by now. Prices rose so much in the past 3-4 years that something had to give... Prices gave, and now we find buyers in the drivers' seat in many areas... But still, the gap between RENTAL COSTS are quite a bit LOWER than MORTGAGE PAYMENTS. So, how to bridge that gap? Well, what worked in the past? What did sellers and wise agents use to create sales in past "difficult" markets? (side note... Why do we call it a Buyers Market, if so many buyers have trouble getting loans, while at the same time, rent rates are so low...) Well, how about the old fashioned Loan Buydown? Remember the 3-2-1 loans? They work, as long as someone pays the upfront cost of the buydown... So, instead of having your seller continually drop the price, why not have that same seller OFFER MORTGAGE PAYMENT HELP TO THE BUYER...? In most cases, buyers benefit very little by a price reduction, but they do quite nicely with a mortgage payment several hundred dollars per month less. Do the math. Each $1000 on the loan costs them about $6 per month. Seller drops the price $10,000 and the buyer saves $60. Seller instead funds a buydown, and the buyers save $200-$300 per month. (the numbers vary based on actual loan rates used...). Which matters more to the buyer?