The Cheverly Goodlife · Market Insight

Alternative to Lowering the Price

When rates soar, do sellers just cut the price? Here's why that's only part of the answer — and why half of all Realtors have never had to figure this out.

Susan Pruden · REALTOR® · October 2026

After last week's post went out, I heard from a fellow agent — someone who lives right here in Cheverly — with a question I've been turning over ever since.

Her question, roughly: When rates make a house unaffordable, do sellers just have to lower the price? And if so, how much?

It's exactly the right question. It's also harder than it looks — because price is only one of the levers, and it's often the least efficient one.

Price Isn't the Only Lever

A 2-1 buydown temporarily reduces the buyer's interest rate — 2 percentage points below market in year one, 1 point below in year two — before settling at the full rate in year three. The seller funds it through closing cost credits rather than a price reduction. Here's what that looks like side by side:

Dollar amounts above are illustrative, based on approximate rates at the time of writing. Rates are moving quickly right now — your lender can run the exact figures for any specific scenario.

The 2-1 buydown costs the seller $3,720 less than the price cut — and saves the buyer nearly five times as much over the first two years. It works because it addresses the buyer's actual problem: the monthly payment, not the sale price on the contract.

The permanent buydown is a different calculation. Three percent in seller credits (~$15,000 here) buys roughly 3 discount points, permanently reducing the rate by about 0.79% for the life of the loan. That's $252 a month saved — forever, if the buyer stays. The catch: when rates drop and the buyer refinances, those points don't transfer. In a market where most buyers are actively waiting for rates to fall, the temporary buydown tends to be the smarter tool.

After the Election

The pre-election posture is real. Both buyers and sellers are in wait-and-see mode right now, and that's thinning the pool of active buyers beyond what the interest rate environment alone explains.

But I want to be precise about what the election can and can't do. The outcome isn't going to change rates. The Fed operates on its own timeline, and no election result flips a switch on monetary policy. What an election can do — and this one especially — is substantially shift consumer confidence. A lot of buyers and sellers right now aren't frozen because the math changed. They're frozen because they're uncertain what the world looks like in 90 days. If the election resolves that uncertainty in either direction, some of that paralysis lifts. That's not the same as rates dropping, but it's not nothing either.

I've Seen This Movie Before

Before I was selling real estate, I was on the lending side. I came into the mortgage business in the mid-1980s, after rates had finally come down from their historic peak — the 30-year fixed had touched 18% in 1981. By the mid-80s it was in the 9-10% range, and the market felt like a gold rush. Everybody was refinancing. Everybody was pulling cash out. Home equity lines of credit were new and being marketed aggressively, and borrowers were using them. I was writing those loans.

Then the recession hit in 1990-91. Rates had crept back up. Property values stalled. The sellers who'd been treating their homes like ATMs suddenly couldn't move — not because they didn't want to, but because the equity wasn't there to cover closing costs, let alone step up to something bigger.

Today's sellers aren't over-leveraged — after 2008, lenders actually required real down payments and real income documentation. Most of today's homeowners genuinely qualified for what they borrowed — the equity they're sitting on is earned, not manufactured. They're stuck for a different reason: they locked in 3% and don't want to give it up. Different trap. Same paralysis. Same denial about where the market actually is.

Half of All Agents Have Never Done This

These agents have never had to explain lagging comps to a seller who doesn't believe them. They've never steered a client toward a buydown instead of a price cut. They've never had to say, with conviction and evidence, "you need to come down 12% before you'll see a serious offer."

That's not a knock on every newer agent — there are excellent Realtors who came up entirely in a seller's market and are putting in the work to understand the tools and conversations this market demands. The sellers who are getting deals done right now are the ones asking harder questions of everyone at the table — including their agent.

The Bottom Line

To my colleague's original question: yes, sometimes sellers need to lower the price — sometimes significantly. The sellers who accept where the market actually is, price ahead of it, and bring the right tools to bear get deals done. The ones who wait spend months chasing the market downward, and usually end up at the same number they would have gotten in week one.

But price is not always the right lever, and it's often not the most efficient one. A well-structured buydown can do more for a buyer's real-world situation per seller dollar than a price reduction can. A good agent is working all of those options.

Here's the hard truth underneath all of it: in this market, you're not just negotiating with a buyer. You're negotiating with an interest rate environment. That changes what conversations you need to be willing to have, and what getting a deal done actually requires.

If all your agent can recommend is cutting the price, it's time to ask more questions. And yes — sometimes the price cut is exactly what's warranted. It just shouldn't be the only tool on the table.