Rental Property Investor · HARFORD COUNTY, MD · Member since 2022 · 26 posts · 18 votes
Hello All,
How would you explain the benefits of a buy down to the seller? Ex. (2/1 buy down) I know there’re some capital gains tax benefits, but what does those differences usually look like to the seller?
What are some examples of the deal breakdown when using this in the past? What was the purchase price? What was the difference compared to lowering the price? Are there any specific resources you normally use to calculate the numbers? When may a buy down not be attractive to the seller? This topic is usually covered briefly when I hear it come up in podcast. Thank you in advance!
A buy down should just be structured as a seller credit and you can use the funds any way you wish (either through rate buydown or lower closing costs). It is less money to the seller; there aren't any magical benefits to a rate buy down for the seller.