Rates went up. Buyers are reconsidering their payments. Listings are starting to sit.
If you’re a listing agent, your next seller conversation needs to include financing.
A buyer can love the house and still struggle with what it costs each month. Before recommending a price adjustment or negotiating a seller credit, let’s look at what those dollars could actually do for the buyer.
We have several strategies to compare. The right choice depends on the property, the seller’s goals, and the buyer’s financial situation.
Your seller’s competition includes the monthly payment
Let’s use a $600,000 home with 5% down and a $570,000 loan over 30 years.
At an illustrative 6.89% rate, monthly principal and interest would be approximately $3,750. At 7.33%, it would be approximately $3,919.
That’s about $169 more each month for the same house.
For a buyer trying to keep the same principal-and-interest budget, that rate change reduces purchasing power by roughly $26,000, assuming the same down payment percentage and loan term.
Your seller may not have changed anything. The buyer’s numbers changed.
These rates and payments are illustrations, not current quotes. Principal and interest exclude property taxes, homeowners insurance, mortgage insurance, and homeowners association dues.
Find out what’s holding the buyer back
“The payment is too high” and “I don’t want to use all my savings” require different conversations.
Before choosing a strategy, I want to understand the buyer’s comfortable monthly payment, available cash, and plans for the home. We also need to know what they want left in the bank after closing.
Then we can compare options that address the actual concern.
For agents, that starts with a simple question:
“Is the bigger concern the monthly payment, the money needed to close, or what you’ll have left afterward?”
That answer gives us a useful place to begin.
Compare a price reduction with a seller credit
A price reduction can be the right move. We still need to look honestly at comparable sales, condition, and how the property is positioned.
We should also compare whether a seller credit toward eligible financing costs would help the buyer move forward.
A credit may help cover closing costs, fund a temporary payment buydown, or pay for a permanent rate buydown. Each use does something different for the buyer.
For the seller, we need to compare estimated net proceeds. For the buyer, we need to compare the full payment and cash needed to close.
Here’s a way to introduce that conversation:
“Before we decide how to use your concession dollars, let’s compare a price adjustment with a financing credit and see what each accomplishes.”
The credit must fit the loan program’s limits and actual eligible costs. We work through those details before negotiating the offer.
Consider a temporary payment buydown
A temporary buydown uses funds set aside at closing to cover part of the buyer’s payment for a defined period. The loan’s note rate stays the same.
With a 2-1 buydown, the buyer’s principal-and-interest payment is calculated using a rate two percentage points below the note rate in year one and one percentage point below it in year two. The full payment begins in year three.
On our $600,000 purchase, with 5% down, a $570,000 loan, a 30-year term, and an illustrative 7.33% note rate, the payments look like this:
Year one: $3,175.86 monthly principal and interest.
Year two: $3,539.30 monthly principal and interest.
Year three onward: $3,919.38 monthly principal and interest.
The total subsidy in this example is approximately $13,483.
That can provide meaningful help during the first two years. For this conventional example, the buyer qualifies at the full note rate and needs to be comfortable with the payment increases.
We can also compare shorter options. A six-month buydown may fit a buyer who wants some breathing room while moving, making improvements, and getting settled.
I’m offering eligible conventional buyers a six-month, 0.50 percentage-point temporary payment buydown at no cost to them, subject to final loan terms. In this example, that reduces the buyer’s principal-and-interest payment by about $192 per month for the first six months. The full payment begins in month seven.
Compare a permanent rate buydown
A permanent buydown uses upfront discount points to obtain a lower interest rate for the life of that loan.
I want to know what we’re paying for the lower rate and how much it saves each month.
Using the same $570,000 loan, an illustrative reduction from 7.33% to 6.99% lowers principal and interest by approximately $131 per month. With an assumed additional cost of $8,550, the simple break-even is about 65 months.
The buyer’s expected time in the loan matters here.
We should also compare how much of a seller credit remains for other eligible costs. With an $18,000 credit budget, the temporary buydown above uses approximately $13,483. The permanent buydown illustration uses $8,550.
The same seller budget creates two different payment paths. We need to show the buyer both.
Give the listing a financing strategy before an offer comes in
You can start this work while the home is listed.
CCM Lock2Sell allows us to explore a seller-funded rate buydown on an eligible property before a buyer signs an offer. That gives you a specific financing option to discuss with incoming buyers.
Before using it, we’ll review current program terms, costs, property eligibility, and buyer requirements.
If affordability keeps coming up in showing feedback, call me. Let’s look at whether a financing strategy belongs in the seller conversation.
Rethink the down payment
A larger down payment reduces the loan amount. It also uses cash the buyer may want for other purposes.
On a $600,000 purchase, 20% down is $120,000. Putting 19% down is $114,000, leaving $6,000 available to compare toward rate costs or keep in reserves.
That smaller down payment increases the loan amount and may affect mortgage insurance and pricing. We run both versions before deciding.
We can also look at Bye Bye PMI, a potential 15%-down option without monthly private mortgage insurance for qualifying buyers.
On a $600,000 home, 15% down is $90,000. That preserves $30,000 compared with putting 20% down.
The larger loan balance, actual pricing, and program requirements all belong in the comparison. The goal is to understand where the buyer’s cash does the most useful work.
Review the loan options and credit details
A 30-year fixed mortgage gives us a starting point. The buyer’s goals may give us a reason to compare other loan structures.
An adjustable-rate mortgage, or ARM, has an initial fixed-rate period followed by potential adjustments. A 5/1 ARM has a fixed rate for five years, then adjusts annually. A 7/6 ARM has a fixed rate for seven years, then adjusts every six months.
We need to explain the adjustment limits, potential payment increases, and costs. The buyer cannot depend on being able to refinance before the rate adjusts.
On eligible loans, I can also review more than one credit scoring model. A different score may affect available pricing, but we still need to compare the actual loan terms, mortgage insurance, and full costs.
Details can change the recommendation. That’s why I want to review the buyer’s situation before we settle on a strategy.
Have the conversation before the buyer walks away
You don’t need to explain every mortgage option at an open house. You need to recognize when financing deserves a closer look and bring me into the conversation.
With a buyer, you can say:
“Before you decide, let’s have Lara compare the full payment, cash needed, and available financing strategies for this home.”
With your seller:
“Let’s look at what buyers are facing and compare where a concession could make the most difference.”
Bring me a listing where affordability keeps coming up, or a buyer who paused because of the payment.
Call me at 951-405-2454 to talk buyer strategy. We’ll look at the numbers and put together a game plan for your next conversation.
All examples are illustrative. Actual rates, annual percentage rates, points, payments, program availability, and eligibility require an individualized quote. Seller credits are subject to program limits and eligible actual costs.
Lara Locke · NMLS 949406
CrossCountry Mortgage, LLC · NMLS 3029 · Equal Housing Opportunity