Price cuts aren’t always the best way to attract buyers. Instead, structured seller credits—especially buy-downs—offer a better deal for both buyers and sellers.
1. A Price Cut Reduces Seller Profits and Isn’t the Best Payment Option
Let’s start with the common approach: price cuts. The table below shows what happens when a seller reduces their price by 3.5%.
Cutting the price by $25K+ lowers a buyer’s monthly payment, but not as much as other options. A one-year or two-year buy-down provides greater monthly savings. Plus, the price cut means the seller walks away with less money than any other option.
A price cut should be the last resort, not the first.
2. Seller Credits for Closing Costs Are Common But Don’t Improve Affordability
Now, let’s compare this to a more common strategy: seller credits for closing costs. The updated table below adds this option next to the price-cut strategy.
Many sellers offer closing cost credits to help buyers bring less cash to the table, but this doesn’t improve affordability.
This strategy reduces upfront costs but results in the highest monthly payment compared to other options. It’s an easy negotiation tactic, but it doesn’t maximize the buyer’s long-term financial comfort.
If the goal is affordability, this isn’t the best strategy.
3. Buy-Downs Benefit Both Buyers and Sellers the Most
Finally, let’s add the last piece of the puzzle: buy-downs. The full table now compares all four options, and this is where the biggest opportunity appears.
Buy-downs lower interest rates temporarily, reducing a buyer’s monthly payment while costing the seller less than a price cut.
A seller offering $10K–$12K for a buy-down keeps more profit than a $25K price drop, while the buyer enjoys a significantly lower mortgage payment. The only catch? The buyer needs enough funds at closing to make it work.
When structured correctly, a buy-down is the smartest negotiation strategy.
Sellers don’t need to slash prices to attract buyers—offering strategic credits can create a win-win deal for both sides.
Ready to See How These Strategies Work for You?
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