The Buydown Method | Prime Mortgage

What You Just Got

A breakdown your buyer reads in two minutes — then texts you back asking “can we do this?”
Open Buyer Guide →
The net-sheet argument that makes a $16K concession look like the seller’s best move — formatted to forward to the listing agent
Open Seller Guide →
The opening question that turns “I can’t afford that payment” into “wait — how does that work?”
Buyer Script ↓
What to say when the listing agent tells you “my seller doesn’t do concessions” — and why they usually come back the next day
Seller Script ↓
Five objections you’ll hear this week and the one-line answers that close them down
Objection Handlers ↓

The 2-1 Buydown in 30 Seconds

The seller contributes a portion of their proceeds at closing to temporarily lower the buyer’s interest rate. Year 1 drops by 2%. Year 2 drops by 1%. Year 3 onward is the original rate. The sale price stays the same. The concession costs the seller less than a typical price cut — and the buyer gets nearly 9× more monthly relief.

Reach for this when:

Your buyer likes the home but the monthly payment is the hang-up
The seller won’t budge on price
You’re competing against other offers and need to stand out
Your buyer is already thinking about refinancing when rates improve

If that sounds like your next deal, this is the play.

What You Need to Run This

The concept is simple. Execution is where most agents get stuck. You need two things:

A lender who structures deals, not just processes loans. Most lenders are reactive — you send them a deal, they run it through underwriting. A buydown needs someone who builds the scenario before your offer goes out, knows the contribution limits across loan types, and gets you the numbers while the deal is still live.

The right words for both sides of the table. That part’s covered — the scripts start below.

Buyer Conversation

What to Say to Your Buyer

After a showing. Your buyer liked the home but went quiet when you mentioned the monthly payment.

You“So what’s sitting with you right now — is it the house, or is it the number?”
Buyer“I mean, I love the house. It’s just… $4,400 a month is a lot.”
You“Yeah. $4,400 a month is real. I hear that from almost every buyer right now — you’re not alone in that. But what if I told you there’s a way to get into this house at $3,550 a month for the first year — and it doesn’t cost you a dime?”

Read the full conversation ↓

Buyer“How? What’s the catch?”
You“No catch. Here’s how it works. We write the offer so the seller puts about $16,000 from their proceeds — money they’re already walking away with — into an escrow account. That account subsidizes your interest rate for two years. Year one, your rate drops to 4.5% and your payment falls to about $3,550. Year two, it’s 5.5%, around $3,975. Year three, you’re at the rate you already qualified for.”
Buyer“Why would the seller agree to that?”
You“Because it costs them less than cutting the price. If the seller drops $20K, they lose $20K and the comp records lower. With this structure, they spend about $16K from proceeds, the sale price stays at $875,000, and the deal actually closes instead of sitting there. They come out ahead. We’re not asking for a discount — we’re asking for a smarter structure.”
Buyer“But what happens after two years? Then I’m stuck with the full payment.”
You“That’s the part that changes everything. You didn’t pay for any of this — the seller did. If rates come down, you refinance into a lower permanent rate. Whatever’s left in that escrow account gets applied straight to your loan balance. So you kept every dollar of monthly savings, paid nothing for the relief, and now you’ve got a lower rate and a lower balance. Zero downside.”
Buyer“What if rates don’t come down?”
You“Then you still got two years of lower payments — about $16,000 in relief — that the seller paid for. Year three you transition to the rate you already qualified for today. You’re exactly where you would have been, minus two years of savings you didn’t pay for. There is literally no scenario where you come out behind.”
Buyer“How is this different from buying points?”
You“Points come out of your pocket. If you refinance after 14 months, you’ve lost about $11,000 — your money, gone. With this, the seller pays for it. If you refi early, the unused funds reduce your balance. Points are your money at risk. This is the seller’s money, zero risk to you.”
Buyer“Okay… so what do we do?”
You“I’m going to have my lending partner run the exact numbers for this property — the payment breakdown, what the seller contributes, the whole picture. We’ll have it before we write the offer, so you’ll know exactly what you’re looking at.”

After this conversation, send your buyer the one-pager. Let the numbers do the rest.

Seller / Listing Agent Conversation

What to Say to the Other Side

You’re calling the listing agent about a property your buyer wants to write on.

You“Hey, I’ve got a qualified buyer who’s ready to write on your listing. We’re coming in at full ask. I want to talk about how we structure it so this closes clean.”
Listing Agent“Full ask? Okay, I’m listening.”
You“My buyer loves the property. The only friction is the payment at today’s rates — and that’s not unique to your listing, that’s every deal right now. So here’s what we want to propose: instead of negotiating on price, we’re asking the seller to allocate about $16K from proceeds toward a temporary rate buydown. The sale price stays at full ask.”

Read the full conversation ↓

Listing Agent“I don’t know — my seller isn’t really looking to give concessions.”
You“I hear you. But let me put it this way — run the net sheet both ways. A $20K price reduction nets your seller $855K and puts an $855K comp on record. Our structure? Your seller nets $859K — that’s $4,100 more — and the comp goes on record at $875K. Full price. Clean for the neighborhood.”
Listing Agent“What exactly is the seller paying for?”
You“About $16K from proceeds goes into an escrow account at closing. It temporarily reduces the buyer’s interest rate for two years. After that, the buyer’s at their standard rate. The seller isn’t losing $16K — they’re spending $16K to close a deal that might otherwise sit for another 30–60 days and end up with a bigger price cut anyway.”
Listing Agent“My seller is going to ask why they should do this instead of just waiting for a better offer.”
You“That’s fair. But consider this — builders are doing this on 60 to 73 percent of their sales right now. It’s standard in new construction. On the resale side, most agents just don’t have the structure to present it, so it feels unfamiliar. But the math is the math. Full price on record. Higher net to the seller. Deal closes now instead of 60 days from now at a lower number.”
Listing Agent“Let me talk to my seller. Can you send me something that breaks this down?”
You“Absolutely. I’ll send you a one-page breakdown right now — shows the net sheet comparison, how the escrow works, why this benefits the seller. Makes it easy to walk them through. And if you want, I can have our lending partner run the exact numbers for this property so your seller sees the full picture.”

Send the listing agent the seller guide — it makes the case without you having to explain the math.

When They Push Back

“Why doesn’t the buyer just buy points?”

Points come out of the buyer’s pocket. If they refinance in the first 14 months — which most plan to in this rate environment — they lose roughly $11K. With a seller-funded buydown, the buyer risks zero. The seller pays for it. If the buyer refis early, the unused funds reduce their loan balance. Points = buyer’s money at risk. Buydown = seller’s money, zero buyer risk.

“My seller won’t give concessions.”

44% of all home sales right now include seller concessions — this is the market, not a special ask. And time on market is not the seller’s friend. Compare the alternatives: the deal falls through, the home sits another 30–60 days, and the seller eventually drops price by $20–25K to attract the next buyer. A $16K buydown concession costs less, closes today, and records at full price.

“This sounds complicated.”

Builders are doing this on 60–73% of new-home sales right now. It’s standard financing infrastructure, not a gimmick. We handle all the structuring. You add one line to the offer, we take care of the rest.

“What if rates don’t come down?”

Then the buyer still got two years of lower payments — about $16K in relief — paid for by the seller. Year 3 they transition to the rate they already qualified for. They’re exactly where they’d have been, minus two years of savings they didn’t pay for. There’s no downside scenario.

“Can this work with FHA / VA?”

Yes. Seller-funded temporary buydowns are allowed on conventional, FHA, and VA loans within standard IPC (interested party contribution) limits. Conventional allows 3–9% depending on down payment. FHA allows up to 6%. VA allows up to 4%. At California price points, a 2-1 buydown cost of ~$16K typically falls well within those limits.

How It Looks on a Real Deal

Example: $875K purchase, 20% down, $700K loan at 6.5%

Without buydown

$4,424/mo

6.50% for 30 years

Year 1 with buydown

$3,547/mo

4.50% — saves $877/mo

Year 2 with buydown

$3,974/mo

5.50% — saves $450/mo

Total buyer relief over 2 years $15,924

Cost to seller (from proceeds) ~$15,900

Seller net after buydown concession $859,100

Seller net after a $20K price cut $855,000

MLS-Ready Language

California MLS rules prohibit specific dollar amounts and percentages in public remarks. Use this compliant template:

“Seller is offering a temporary interest rate buydown to qualified buyers. Contact listing agent for program details and a custom payment breakdown.”

Keep it simple in the public remarks — no dollar amounts, no rate percentages. The specifics go in the agent-to-agent notes or in the offer itself. Submit a deal below and we’ll provide the exact figures plus compliant MLS language for the transaction.

Who Runs the Numbers

Frank Menjivar is the broker-owner at Prime Mortgage in Costa Mesa — 20 years in lending, 500+ five-star reviews, and most loans close in 30 days or less. He structures the deal before your offer goes out so you walk in with the math already done.

Buydowns are one tool. Frank’s team runs scenarios across every loan type — conventional, FHA, VA, jumbo, investment, DSCR — to find the structure that gives your deal the best chance of closing.

NMLS #981076 CA State Licensed Bilingual (EN / ES)

Get a Custom Breakdown for Your Active Deal

Drop the details below and Frank will have a ready-to-use buydown comparison back to you before your next showing.