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What is a 3-2-1 buydown and how does it work?

Thursday, December 14, 2023   /   by Javier Rojas

What is a 3-2-1 buydown and how does it work?

Attract More Buyers with a 3-2-1 Buydown: How This Incentive Can Sweeten Your Listing!

In today's competitive market, sellers need every edge to attract serious buyers. While stunning photos and captivating descriptions are important, offering unique incentives can make your listing stand out from the crowd. Enter the 3-2-1 buydown, a powerful tool that can boost your appeal and accelerate your sale.

What is a 3-2-1 Buydown?

Simply put, it's a seller-paid interest rate reduction for the buyer's first three years of ownership. Here's how it works:

    • Year 1: The buyer enjoys a significantly lower interest rate, typically 3% lower than the original rate. This significantly reduces their monthly payments, making your home more affordable.

    • Year 2: The interest rate drops by 2% compared to the original rate, offering continued savings.

    • Year 3: The final year sees a 1% reduction, gradually easing the buyer towards the standard loan rate in year four.

Why should sellers consider a 3-2-1 buydown?

The benefits are numerous:

    • Increased buyer interest: A lower interest rate catches eyes and sparks excitement. Buyers are more likely to contact you and schedule showings.

    • Faster sale: With the initial financial hurdle lowered, buyers may be quicker to make an offer, reducing your time on the market.

    • Competitive advantage: Stand out from other listings in your price range by offering a unique incentive that directly addresses affordability concerns.

    • Higher asking price: The buydown can potentially justify a slightly higher asking price, offsetting the cost of the incentive.

    • Attract qualified buyers: By showing you're willing to invest in the sale, you may attract more financially secure buyers.

Marketing your 3-2-1 buydown effectively:

    • Headline it: Clearly state the 3-2-1 buydown in your listing title and throughout your description.

    • Quantify the savings: Use real numbers to showcase the amount of money the buyer will save each month and year.

    • Highlight affordability: Emphasize how the buydown makes your home more accessible to a wider range of buyers.

    • Create visuals: Use infographics or charts to illustrate the buydown's impact on monthly payments.

    • Target your audience: Tailor your marketing to buyers who may be particularly sensitive to interest rates, like first-time buyers or those with budget constraints.


    • Consult a financial expert: Discuss the cost and implications of a buydown to ensure it aligns with your financial goals.

    • Understand the market: Research similar listings and assess if a buydown will give you a significant edge.

    • Be transparent: Clearly communicate the terms of the buydown to avoid any misunderstandings or surprises.

By offering a 3-2-1 buydown, you're not just lowering the price, you're adding value and making your home an irresistible proposition. So, unlock the potential of this powerful incentive and watch your "For Sale" sign vanish in no time!

Bonus tip: Consider partnering with your local lender to offer the buydown as a joint marketing initiative. This can increase exposure and strengthen your credibility.

With a little creativity and planning, a 3-2-1 buydown can be the secret weapon that helps you sell your home faster and for a price you'll love!

Javier Rojas - Broker Associate at Fontana Realty
Javier Rojas
915 SE 17th St
Ocala, FL 34471

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