Five Ways Your Sellers Can Help Buyers Handle Higher Rates

The rapid rise of mortgage rates in the spring of 2022 sent a shock wave through the housing market. While buyers and sellers are beginning to adjust and accept that mortgage rates aren’t likely to dip back to 3% or less anytime soon, rates that hover around 5% to 6% reduce affordability for buyers compared to those historically low rates.

One in five sellers dropped their listing price before their home went under contract in August, according to But price reductions aren’t the only option for homeowners in a shifting market. And, because of the continued lack of supply, few locations are considered in a buyer’s market. That means your sellers have choices about how they can help buyers adapt to higher interest rates.

Five seller techniques to attract and assist buyers

As an agent, you can help your sellers understand the pros and cons of these options depending on local market conditions.

1. Buydown the mortgage rate. Sellers can pay points – equal to 1% of the purchase price – to reduce the buyers’ mortgage rate for the life of their loan. Sellers can pay two or three points ($8,000 or $12,000 on a $400,000 house) to reduce the buyers’ mortgage rate by about one-half a percentage point. The money comes out of the proceeds of the sale at the closing. Rather than lowering the price by $20,000 or more, your sellers could get a better net with a buydown. If they want to spend less, a temporary buydown of the rate for the first year or two could be less costly and still help the buyers afford their home. A lender can do the math to compare these options.

2. Pay some closing costs. The rules vary from one loan program to another, but sellers can typically contribute anywhere from 2% to as much as 6% of the closing costs that buyers might normally pay. This allows buyers to keep more cash in the bank while they adapt to their new mortgage payment. Alternatively, the buyers could make a bigger down payment or buydown their own rate to make their monthly payments more affordable. Depending on market conditions, your sellers could negotiate a slightly higher price to cover their closing cost contributions.

3. Make presale renovations. Buyers often worry about how they can afford their new mortgage payment and pay for renovations when they move into a new property. Sellers can ease that financial burden by contracting with Revive to do presale renovations and pay for the work at the closing table from the proceeds of the sale rather than with cash. Your sellers win with a higher price for a renovated home and the buyers get the peace of mind of moving into a house that won’t need work.

4. Find homebuyer assistance programs. Many buyers are unaware that they may qualify for down payment and closing cost assistance or low-interest loans. You can search for information on programs by location or ask a lender about loan programs that could make a property more affordable.

5. Lower the price. Your sellers will probably see this as a last resort, but you can explain the consequences of waiting too long to lower the price. They could end up with an even lower offer if their home stagnates on the market.

Talk to your most reliable lenders and discuss some of these creative options with them so you can provide the most up-to-date advice for your clients in this shifting housing market.

written with intention by
Jessica Morrow
Head of Operations