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Examples of seller paid temporary buys and fees
“You can get a one-year, two-year or three-year rate purchase, which, of course, corresponds to different levels of cost,” Paris explained. “But this is not a good way to lower the price of a home, but a good way to affect the buyer’s monthly payments in other ways.”
Here are the buyers who use a $400,000 loan with a base interest rate of 6.5%, which is the most common example of seller temporary buy offers and costs.
1-0 Buy
The seller’s mortgage rate fell by 1% during the first year of the loan. After that, the rate will be adjusted to the full bill rate for the remaining period. This option is usually the cheapest for the seller and still gives the buyer a modest break during the first year of ownership.
| Year | speed | Monthly payment | Monthly savings | Annual savings |
| 1 | 5.50% | $2,269 | $257 | $3,086 |
| 2 | 6.50% | $2,526 | $0.00 | $0.00 |
Total purchase cost of the seller: $3,086
1-1 Buy
With this structure, the buyer’s mortgage rate fell by 1% in the first year and 1% in the second year, and then restored the full notes for the third year. It offers modest but stable savings early in the loan, which can be a good mid-ground option for sellers who want to offer incentives without committing to a more expensive buying strategy.
| Year | speed | Monthly payment | Monthly savings | Annual savings |
| 1 | 5.50% | $2,269 | $257 | $3,086 |
| 2 | 5.50% | $2,269 | $257 | $3,086 |
| 3 | 6.50% | $2,526 | $0.00 | $0.00 |
Total purchase cost of the seller: $6,172
2-1 Buy
With this structure, the buyer’s tax rate was reduced by 2% in the first and 1% of the second year, and then adjusted to the full charges for the third year and above. This is a popular option in resale transactions because it can provide significant savings upfront, often enough to swing cost-sensitive buyers without substantial cuts to gain.
| Year | speed | Monthly payment | Monthly savings | Annual savings |
| 1 | 4.50% | $2,025 | $502 | $6,024 |
| 2 | 5.50% | $2,269 | $257 | $3,084 |
| 3 | 6.50% | $2,526 | $0.00 | $0.00 |
Total purchase cost of the seller: $9,108
3-2-1 Buy
The option lowered the buyer’s interest rate by 3% in the first year, 2% in the second year and 1% in the third year of settlement in the fourth year. It provides the most important initial savings, but also requires the largest seller franchise. Therefore, it is more common in new buildings or higher-priced homes and has more room for negotiation.
| Year | speed | Monthly payment | Monthly savings | Annual savings |
| 1 | 3.50% | $1,794 | $732 | $8,784 |
| 2 | 4.50% | $2,025 | $502 | $6,024 |
| 3 | 5.50% | $2,269 | $257 | $3,084 |
| 4 | 6.50% | $2,526 | $0.00 | $0.00 |
Total purchase cost of the seller: $17,892