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Interest Rate Buydowns Benefit Buyers and Sellers

Posted by wsmeyer on February 3, 2024

What Is A Seller-Paid Rate Buydown?

Some lenders allow sellers to  “credit” part of their proceeds to the home buyer. This seller concession can be used to buy down the interest rate. The whole idea of a seller-paid rate buydown is to get money back from the seller to temporarily, or for the term of the loan to  buy down the interest rate. 

The Upside for Buyers

A lower interest rate, saving the buyer money in the long run with lower payments for the short term or possibly over the term of the loan. This also puts the buyer in a good position to refinance if interest rates drop in the next couple of years.

The Upside for the Sellers

This could avoid having to make a price reduction on the cost of the home thus reducing upfront price concession costs. In a soft market, a seller offering a buydown may also stand out among the competition and entice buyers.

Not all lenders are willing to do this, so buyers and sellers should seek advice from a financial specialist.

If you are a seller interested in how Selling South Dakota Real Estate can use a Seller-Paid Rate Buydown to market your home and make it stand out please contact us at

If you are a buyer looking to take advantage of this to lower your monthly payments let John or Scott go to work for you to find sellers who are willing to make this concession to you. Please contact us: or you can text or call 605-630-3548 


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