Expand the Buyer Pool by Increasing Affordability 

Affordability is crucial in today’s market—but achieving it might be easier than you think. Many buyers focus on price reductions to improve affordability, but is there a better way?

If you're selling a home, you might consider dropping the price by $10,000, $25,000, or even $50,000 to attract buyers. But is cutting the price the best strategy, or would reducing the interest rate be more effective?

Is there a way for both the buyer and seller to come out ahead? Let’s explore the possibilities.

For illustration purposes, let’s examine the numbers based on a list (purchase) price of $875,000, a 20% down payment, a 740 score, and a 6.50% interest rate (APR 6.682%) on a 30-year Conventional loan:

$25K "PRICE" Drop

• New Price: $850,000
• Monthly Savings: $126.42
• Income Required: $173,319 annually.

Click here to see that a $25,000 price drop slightly reduces a potential buyer's monthly payment, but it is not a real game-changer.

Income Assumptions: 45% DTI (Debt-To-Income) with $1,500 in miscellaneous (car, credit cards, etc.) monthly payments.

$25K "RATE" Drop | Permanent Rate Buydown

• Original List Price: $875,000
• Interest Rate: Reduced from 6.5% to 5.25%
• Increased Monthly Savings: $559.05 (Difference of $432.63)
• 11.12% Less Income Needed to Qualify: $158,411 annually vs. $173,319

Click here to see how buyers approved for $764,441 can now afford homes priced 14.46% higher, without increasing their monthly payment. Instantly expand your buyer pool.

Curious How We Can Help You Market Smarter, Without Slashing the List Price?

• Individual Listings: Click here!
• Neighborhoods & Communities: Click here to see the next level!

Key Takeaway

• $25K Price Drop: Provides limited monthly savings with a small impact on affordability.
• $25K Rate Buydown: Creates much larger monthly savings and lowers the income needed to qualify, helping more buyers enter the market.
• For Realtors: Help buyers afford higher-priced homes without stretching their budgets—offering a smarter solution than just lowering the price.

Let’s work together to bring affordability back and make the market work for everyone!

If you have any questions or need more information, please don't hesitate to contact us. We're here to help you every step of the way!

Ready to start your home journey? Click here to submit your loan application today!

Best regards,

Michael Thayer, CMPS, CMA

Guild Mortgage | Branch Manager

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