Buy down the mortgage
Here’s something I found in Realtor® Magazine to consider when selling a your home as mortgage rates increase. Don’t cut the price…buy down the mortgage.
Instead of cutting the price, a seller might want to consider paying points to reduce the buyer’s interest rate on the mortgage.
With a 2/1 buydown, the buyer gets a rate 2 percentage points below the market rate for the first year of the loan and one point lower in the second. Then the loan reverts to the market rate.
The 2/1 buydown costs about $4,380 on a $200,000 loan. In the first year, buyers would pay $225 less each month. In the second year, they would pay $109 less. To match the first-year monthly payment without the buydown in this example, the seller would have to cut the price by $50,000.
Source: Kiplinger Personal Finance Magazine (03/01/07)