At first glance, this seems like a rotten deal for the seller or builder. This could actually work in their favor. Before, due to record low rates, buyers were paying for homes over their true value. That phase has cooled off, and so have potential buyers.
Some sellers and builders may be able to wait for the right buyer to come along. Others are eager to sell. If a house has been sitting on the market for a while with no offers, a 2/1 buydown will increase the chances of selling property while retaining its true value.
Instead of dropping the listing market price on your house, you could instead offer to pay the interest ahead of time, which could cost a fraction of how much you’d have to drop the sticker price to receive any other offers.
For more information, talk to your local First Option Mortgage lender today.