One caveat - this is my understanding of a buy down as a nonprofessional.
Here's how I understand it works:
In a 2-1 buy down, is sort of similar to buying points, but has bigger immediate advantages for the buyer. It basicially subsidizes the buyer's mortgage for two years.
Suppose your buyer has a 6.75% interest rate on her loan. You pay the difference as she had a 4.75% interest rate on her loan.
The second year, you pay the difference as if she had a 5.75% interest rate on her loan.
The example below shows how just over 8k from the seller saves the buyer over $440/month on his mortgage the first year and over $220 the second year.
This example assumes a 30-year fully amortized mortgage.
Say your loan balance is $350,000 and the interest rate is fixed at 6.75% for 30 years. The seller (or you) could "buy down" the interest rate by paying a lump sum of $8,063. This is how it works:
First-year interest rate is 4.75%, payable $1,826 per month.
Second-year interest rate is 5.75%, payable $2,043 per month.
Years three through 30, interest rate is 6.75%, payable $2,270 per month.
First-year savings (as compared to $2,270 per month) is $444 per month or $6,332.
Second-year savings (as compared to $2,270 per month) is $228 per month or $2,731.
Add up the annual savings: $6,332 + $2,731 = $8,063.
Therefore, it costs $8,063 to buy down the interest rate and payments for two full years.
Note: Lenders typically require a 5% down payment for a 2-1 Buydown.
1) Price it right. Make sure it is competitively priced with other similar homes which are actually selling in your neighborhood. There are lots of resources to determine what the current market price is, including working with your agent to complete a Comparative Market Analysis.
2) Put it in TOP condition. Fix anything that's broken. Touch up paint. Clear clutter. De-personalize decorating and neutralize colors. Make sure the yard and interior are well-maintained and ready for their new owner. Also, check out the competition and make sure your home 'shows' better. There are not many buyers. Be on the 'short list'.
3) Get the word out. Advertise where buyers are looking. Things like online advertising can be very inexpensive and can target a very specific group of buyers.
People are buying right now, but you have to find those people and set your home apart from the large amount of inventory currently for sale.
Be painfully objective & realistic about the condition of your home for starters. I recommend an inspection by a professional to see what needs to be done & then get it done. Prospective buyers love pro-active sellers. You may need to spend some money on making it show GREAT, I don't mean ok, I mean GREAT. Remember, you have tremendous competition out there. That might mean some professional cleaning, painting, repairs, etc. Then once it looks like new, keep it ready to show even though it's a lot of work. Price it slightly under others similar to it. Don't start out with the attitude that you can price it high & see what happens, then drop the price. It may sound like a good srategy, but it's not. & Don't second guess yourselves, (you know, wondering if maybe you could have gotten LOTS more for it) when it sells fast. If it sells fast that just means you did everything right.
If you ever have any needs in Tellico Village or know anybody who does, please contact me.
Good luck with your move. I'm confident you'll be in a happy new home soon!
Price-In this market having your home priced correctly is absolutely critical. You have to know what other comparable homes have sold for recently.
Promotion- How is your property being marketed to potential buyers? Are you get the most exposure to the people looking to buy?
Presentation- Your home needs to look its absolute best for each prospect that walks through the door. Think about how builders spend so much money merchandising their model homes; there's a reason they do this but you can accomplish this without breaking the bank.
People- Maybe the most important factor. You need to have a professional Realtor who knows not only how to market but how to sell, too. All of the best marketing ideas only get people to look at your home, you need a Realtor who knows how to sell.
Oh, and I speak Korean, too. Please feel free to contact me if you have any questions or would like additional help.
6500 Stableford Lane
Franklin, TN, 37069
1. Right Price
2. Best Image
3. Community Connection
I have found that a lot of Cheatham County is based on community networking so you need someone that is in the area. I would be happy to come out and give you and honest opinion of your property.
You also need someone that is an expert at marketing and not going to take a couple of bad photos and call it a day. Last year I took a property out there that had been on the market 200+ days and was able to get it under contract in 48 hours. So YES, Image matters and in cases it is even more important than price.
I coach youth baseball out there so I am always in the area after work if you would like some help or just an unbiased opinion of your place.
The Atlas Marketing Group
There are 14 active listings in Oak Pointe right now, and only 6 homes have closed in the past six months. I agree with the first agent's response - these are all very important. I focus probably 80% of my advertising budget on online advertising, including enhanced listings on Realtracs, Realtor.com, Point2NLS, Craigslist, Yahoo Homes and ore.
Give me a call or drop me an email with the details of your home, and I'll run a preliminary CMA for you. There's no obligation....
Hodges & Hodges Realty