The Man/Woman in the Mirror
My musical inspiration this week comes from the 1988 hit “Man in the Mirror” by Michael Jackson. WE need to change, starting with the man/woman in the mirror. We are no longer in a seller’s market. We are officially in a buyer’s market (houses on the market over 60 days), and the old ways of attacking the problem with price cuts are probably not the best solution to the problem of sitting inventory for either the seller or a potential buyer. Builders are already doing it and even buying permanent rates below 6% and, in some cases, even below 5 -not a temp buydown- a true fixed rate.
There are builders out there today offering as much as 6% seller contributions, which, on a $830K home price example, is almost $50,000 in seller contributions. I’ve been in this business for over 40 years, and I’ll be honest: you probably can’t tell an $800K home from an $830K one. But your wallet can—depending on how you structure the deal.
Quick story, two paths (Just Examples)
Path A – “Just knock the price down.”
- Sales price slips from $830K to $800K.
- You put 10 % down as planned.
- Net result? About $3,000 less out of pocket and maybe $60 shaved off the monthly payment. Not terrible… but keep reading.
Path B – “Leave the price, give me the credit.”
- Price stays $830K.
- Builder hands you $30,000 in seller contributions
- Apply that credit to closing costs, escrows, and—my favorite move—buying the rate down. Use the full $30K and you could slide your rate from roughly 6.875 % to 6.375 %.
- What’s that worth? $20K–$30K less cash at closing and $200-plus lower every single month.
Let me say that again: you keep tens of thousands in your bank account and chop a couple hundred off the payment. Compare that to saving three grand up front and paying a couple hundred more every month. No contest, right?
The savings are real for out-of-pocket and monthly payments, and the seller will net the same compared to lowering their price by $30,000. One added benefit is that your neighbors won’t “dislike” you for lowering your price and thus lowering the comparable in the neighborhood. Cash flow and $$$ out of pocket are both “game changers,” and the scenario I just showed you not only saves money out of pocket but also could lower your payment notably much better than saving maybe $3000 out of pocket with a price cut, but having a higher payment? Change starts with the man/woman in the mirror…it could start with you!
Remember… the BEST RATE… IS A LOCKED RATE… with a float down… ask me about our program that allows you to lock your rate and then float down if rates move lower.
Make sure you (or your buyer) get pre-approved before looking at homes so we can determine if you are looking in the correct price range and have you armed to submit an offer with a pre-approval letter!
Thank you for reading this blog. I hope that the facts and insights I share provide value to you.
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Blog post date: Thursday, April 24, 2025
