Frequentaly Ansked Questions

      How do I overcome a sluggish market to sell my house?

When a house is stuck in seller's limbo, one way to jump-start the sale is to offer a mortgage buy-down, particularly if high interest rates are an issue. While the amount of money involved is less than a price reduction, the bottom line is often more attractive to buyers.

• Here's how it works:
  The seller offers a fixed dollar amount in cash to buy down the mortgage interest. The subsidy could be less for the second year, and even smaller – if it is continued at all – for the third year, but is often a gross dollar figure calculated on a set period, for instance, until the maturity date of the mortgage.
• For example:
  To “buy down” an interest rate by 2% (say, 7% down to 5%) for a two year period, the interest factor is determined based on the balance of the term, (if the loan was initially for a 2, 3 or 5 year term, as an example), the amortization period (whether it’s a 10, 15, 20 or 25 year mortgage for example). The interest factor (so much per $1,000 of loan value) is then multiplied by the balance of the loan, and an interest rate buy-down is determined. In a very slow market, this is often a valuable technique to use.
  

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