As mortgage rates fall, here is a sales incentive to consider.
Instead of cutting the price, a seller might want to consider paying points to reduce the buyer’s interest rate on the mortgage. With a 2/1 buy-down, the buyer gets a rate 2 percentage points below the market rate for the first year of the loan and one point lower in the second. If the loan was a fixed rate mortgage the loan reverts to the the fixed rate in month 25 of the loan. The 2/1 buy-down costs about $4,500 on a $200,000 loan. In the first year, buyers would pay substantially less each month. In the second year, their payments would still be 1% below their fixed 30 year loan. To match the first-year monthly payment without the buy-down in this example, the seller would have to cut the price by a large amount.

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