So you have a buyer who wants your home but they either can't or won't pay the price you need. What can you do? One option is to utilize Wisconsin Mortgage's Rate Relief program. As a seller you buy down the buyer's interest rate which enables the buyer to pay more for the house but keep the same monthly payment.
For most buyers, buying a home is less about the sales price and more about the monthly payment. Think about how cars are sold, they aren't sold on total price but on monthly payment. Treat selling your home the same way. If you can bring the buyer's payment into their comfort zone, you have a sold home!
I am not a mortgage broker/loan officer and each situation will be different but this should serve as a good example of what can happen.
On the left is the buyer's original offer of $200,000 on a $220,000 home. At an interest rate of 5.5% this made the monthly principal and interest payment $1078/month on their $190,000 loan. On the right is a higher offer where the sellers are contributing 3% back to the buyers for an interest rate buy down.
Sales Price $200,000 $216,000
Points Paid By Seller $6480
Loan Amount $190,000 $205,200
Interest Rate 5.5% 4.375%
Monthly P/I Payment $1078 $1025
Seller Net $200,000 $209,520
The payment of $1078 was the buyer's top payment. Because the buyer was putting down 5%, the seller could contribute up to 3% of the purchase price. Contributing that 3% changed the rate from 5.5% to 4.375% at a cost of $6480 to the seller. That dropped the payment for the buyer by $53 per month but allowed the seller to net $9,520 more for their home. In this case it allowed the buyer and seller to come to an agreement and resulted in an accepted offer.
If you as a seller agree to participate in this program with the right offer, Shorewest Realtors will advertise this to buyers through our Website and special yard signs. If you are in Southeastern Wisconsin contact me or Wisconsin Mortgage. If you aren't in Southeastern Wisconsin I encourage you to talk to a loan officer in your area prior to receiving an offer so that you are familiar with your options. Imagine the competitive edge this program could give you when buyers sit down to compare homes.