How do you sell your home in a slow market? Lower the price.

Yes, it often works. Price is probably the 1 reason a property won't sell.

That, plus you have to have a home people want to buy, to begin with, you know? Location, size, and quality are important. Especially if the competition is in a better neighborhood, for the same price, in a new building. That sort of thing.

However, there are other ways to encourage people to make an offer.

I leave mortgages to lenders. I don't pay too close attention to how my clients finance their purchases (most pay cash, I think ... ha ha.)

An idea I have always been intrigued about, however, is sellers offering to assist potential buyers with their loans.

One way to do this is to give a buyer seller-financing. Instead of the buyer going to a bank, the seller writes up a note for the buyer. (Often, seller-financing is for only a part of a loan - for example, the buyer gets an 80% loan from a bank, then another 10% loan from the seller.)

This might be for a lower-interest rate than what the buyer would get at a traditional lender. Often, it's for a shorter period of time than a traditional mortgage loan (10-years vs. 30-years, for example). Obviously, attorneys should be involved.

A more clever way is a buydown.

I've never spent the time to learn a lot about it, but if you're interested, here are the details.

You're a seller. You have your condo listed at $200,000 (I know, right?).

Your home isn't selling. So you wonder: should you lower your price 5% ($10,000) or should you offer to pay points on a buyer's loan.

If you lower the price 5%, boy, that's gonna hurt. You were counting on that $10,000 to buy your next home.

What about paying points?

Here's what that's all about:

When a buyer goes out to a bank for money, the bank offers to lend at a certain interest rate, most often dependent upon the credit-worthiness of the borrower. Credit-worthiness based on past credit experiences of the buyer, and the buyer's income and debt load.

Lenders often charge "points". A point is 1% of a loan amount.

Usually, a borrower can find a loan program with no points. This is good, if a borrower is short on cash - maybe he/she can afford to make the monthly payments, but doesn't have a bunch of money set aside for down payments or closing costs.

So, the borrower will have no choice but to take the no-points loan. Trouble is, the interest rate on a no-point loan will be higher than one with points.

If a borrower pays points, then they often can get lower interest rates. And, lower interest rates mean lower monthly payments.

So, you can see from the buyer's point of view, paying points is a great way to lower the cost of buying.

What can you, as a seller, do?

You can offer to pay the points.

On a $200,000 loan (yes, I'm assuming 100% financing, but only to make the math easy), one point would be 1%, or $2,000. Two points would be $4,000.

Suppose this cuts 1/2 a point off the loan's interest rate, maybe from 6.25% to 5.75%.

The buyer's monthly payment will drop from $1,231 to $1,167, $60, or 4.8%. (Just as important, the buyer will pay $23,000 less in interest over the term of a 30-year loan.)

That's a good thing for a buyer (and, obviously, the savings increase if you're talking a $400,000 or $600,000 loan ...).

You love it, as the seller, because, instead of lowering the price of your home $10,000, you've only had to kick in $4,000. You keep $6,000, you find a buyer, everyone's happy. (Oh, I guess your real estate agent is happy, too, since the sales price is higher than it would be, otherwise. Thanks for that!)

There are other things to know about points and the process (another good thing is, the buyer gets to deduct the points on his/her federal tax return!). I suggest talking with a mortgage broker about it.

More: Best way to sell house in buyer's market: Consider rate buydowns when buyers are short on cash - By Jack Guttentag, The Mortgage Professor, Inman News