Pricing strategy
Rate buydown or price cut
The same dollars from you, two ways: off the price, or toward the buyer’s rate. See which one lowers the buyer’s payment more.
Behind the numbers
How it works
Price cut
Your budget comes off the price. The buyer’s loan is the lower price minus their down payment, at the same rate.
Rate buydown
Your budget buys points. Points = budget ÷ (1% of the loan). The new rate = rate − points × the rate drop per point you enter.
The comparison
Principal and interest on a 30-year loan for each. Your cost is the same either way, so the question is which helps the buyer more.
2-1 buydown
The cost of paying the difference between the full payment and a payment at 2% lower in year one and 1% lower in year two.
Adjust it
What each input means
| Price | Before any concession. |
|---|---|
| Down payment and rate | The buyer’s. Examples only. |
| Concession budget | What you are willing to give, in dollars. |
| Rate drop per point | From a lender’s quote. It changes with the market and the loan. |
When to use it
Made for
- A listing that needs a push
- Responding to a buyer’s request for credits
- Choosing how to advertise an incentive
Selling
Know your number, prepare what actually pays back, and see exactly how Morgan will present and sell your home, before you decide anything.
- Home value
- Seller prep
- How Morgan sells it
- Your plan
Questions
Good to know
Is a buydown always better?+
Not always. It depends on the lender’s pricing for points, how long the buyer keeps the loan, and loan limits on seller credits. Morgan and the buyer’s lender check the real numbers.
Are there limits on seller credits?+
Yes, loan programs cap how much a seller can contribute. The buyer’s lender confirms the limit for their loan.
Keep planning
Related tools
Before you listSeller net sheetWhat you walk away with after commissions, closing costs, credits, repairs and payoffs, line by line.Open →
Selling a fine homeCompare offersThe highest price is not always the best offer. Every offer side by side: what you actually walk away with,…Open →
Timing a saleSell now or waitNow and later side by side: your price and rate assumptions, the cost of waiting, and the next home’s payment.Open →Want Morgan’s eyes on it?
Send your numbers and she will review them personally, with real figures for your area.