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Price Drops vs Rate Drops – The Strategic Approach

In recent times, rising interest rates have been a significant hurdle for prospective homebuyers, affecting their ability to qualify for mortgages. This situation has also led to a trend where sellers are reducing their listing prices to make homes more affordable. However, many sellers lack the understanding or means to demonstrate just how much more impactful lowering interest rates can be for a buyer's monthly payments compared to just reducing the sale price.

Price vs. Rate Comparison:

I aim to illustrate with a direct comparison how a decrease in the sale price influences a buyer's monthly mortgage payments and their qualification criteria. More importantly, I'll show how using the same financial figures to lower the mortgage rate can have a far greater positive effect on affordability for the buyer.

Seller Buy Down - A Strategic Approach:

Opting for a seller buy down, which involves reducing the buyer's mortgage rate instead of the listing price, offers several advantages:

  1. Triple Savings: By applying the same funds that would have gone to a price reduction towards lowering the interest rate, a seller can triple the savings on the buyer's monthly payments.
  2. Efficient Use of Funds: Instead of a full price drop, a seller can use just one-third of that amount to decrease the buyer's rate, achieving similar financial benefits for the buyer while retaining two-thirds of the potential price reduction.
  3. Market Stability: Utilizing a seller buy down for full-price offers helps protect property values within the community, ensuring stable comparables for future transactions.
  4. Addressing Affordability: With limited resources, implementing a seller buy down is a more cost-effective strategy than broad price reductions to combat the affordability crisis facing many buyers.

Marketing Your Property with Innovation:

Understanding the significant benefits of reducing rates over prices can transform how we approach property sales. To leverage this, I propose creating a custom Seller Buy Down (SBD) Video for your property. This innovative marketing tool will not only highlight the affordability of your property but also educate and attract a wider pool of potential buyers, contributing to the broader effort of making homes more accessible in today's challenging market.

Reviews

"Amazing customer service, quick response time, creative thinking/planning"

caitlin f

"Shelby and Lois provided timely and great communication. Shelby’s knowledge allowed me to get a great rate for these times. I always felt like a person and not just an anonymous client."

lisa jill k

"Shelby went above and beyond to help my first time home buyers. I’m excited to continue to work together in the future!"

claire m

"Creative and non stop until the job was done. My wife and I both agree we felt that Shelby went above and beyond to get us the approval and rate we needed. She even went as far as to work on a Saturday close to our closing date to make sure everything was perfect. I am excited to refer others to her in the future. Thank you, Shelby!!"

austin l

"Shelby and the team were fantastic to work with!! It was my first experience purchasing a place of my own and they made the process seamless."

grace b

"Shelby is a top notch lender! She is on her game and great with communication!! I highly recommend!"

katherine lee

"Shelby was awesome per usual! She is on top of her game, and great with communication throughout the process! I highly recommend!!"

katherine l

"Shelby was very easy to contact and readily available to answer any questions we had despite being outside of normal business hours."

camille n a

"Shelby was fantastic!! She is super communicative and creative. We felt very supported during the stressful experience of home buying in this market."

margaret howard lloy s