Your house has been on the market a few weeks. The showings slowed down. Your agent is starting to use the phrase "market feedback."
The reflex is to cut the price.
Before you do, there's a second option, and most sellers I talk to have never heard of it: instead of lowering your price, you contribute toward lowering the buyer's interest rate. It's called a rate buy-down, and in a market where payment — not price — is what's stopping people, it often moves a house for less money than a price cut does.
Why payment is the thing, not price
Buyers aren't sitting out because your house costs too much. They're sitting out because the monthly number doesn't work.
Rates have moved up over the past several weeks. For a buyer who got pre-approved earlier in the year, the house they qualified for then isn't the house they qualify for now. Nothing about your home changed. Their payment did.
A price cut helps that a little. A buy-down helps it more per dollar, because you're attacking the rate — which is what the payment is actually made of.
What a buy-down is, in plain terms
You, the seller, credit money at closing. That credit goes toward reducing the buyer's interest rate — either for the first year or two, or for the life of the loan.
Temporary buy-downs lower the rate for a set period and then step back up. A "2-1" drops the rate two points the first year and one point the second, then it's the normal rate from year three on.
Permanent buy-downs lower the rate for the whole loan. They cost more up front and do more over time.
They can also be layered — a permanent reduction with a temporary one stacked on top for the first couple of years, which is where a lot of deals are landing right now.
How much you're allowed to contribute depends on the loan type and the buyer's down payment, and there are caps. Your lender runs that math. I don't, and anyone in real estate who tells you they do should be making you nervous.
How to compare the two
Ask your agent and the buyer's lender to put the two side by side, using the same dollar amount:
- A price cut of X — what does that do to the buyer's monthly payment?
- A closing credit of X toward a buy-down — what does that do to the buyer's monthly payment?
Same money out of your pocket. Usually a very different monthly number. Run it before you decide, not after.
One more thing worth knowing: a price cut is public and permanent. It resets how every future buyer anchors on your house, and it shows in the listing history. A closing credit is negotiated at the offer stage and doesn't rewrite your price.
Where this falls apart
A buy-down doesn't fix a house that's genuinely overpriced. If you're well above the comps, no credit structure saves you — you were going to cut anyway, and you should do it sooner rather than later.
It also doesn't fix a house that shows badly. Payment math gets a buyer in the door. It doesn't make them want to be there.
And it still has to appraise. The credit is money changing hands at closing, and the deal has to pencil.
If your house is sitting
Have this conversation before the price-cut conversation, not instead of it. Most sellers don't know this is on the table, which means most of the houses competing with yours aren't offering it either.
I'm happy to walk through both scenarios on your specific house — what you'd net, what it does to a buyer's payment, and whether price is actually your problem or whether something else is.
Jon Gryn is a REALTOR® with The Agency | Chavez Team, DRE #02334877, serving Cypress, Los Alamitos, La Palma, Buena Park, Seal Beach and Huntington Beach. He is not a mortgage lender. This article is general information, not lending advice or an offer of credit — loan terms, eligibility and contribution limits come from your lender.