This Week’s Market Reflection: Inspired by the Bangles “Walk Like An Egyptian”

This week’s musical inspiration comes from the Bangles’ 1986 hit, “Walk Like an Egyptian.” Over the years, I’ve observed two markedly different approaches to selling real estate—resale properties versus new construction—and it may be time for resale sellers to start “selling like a builder.”

The era of multiple offers, waived financing, and appraisal contingencies has largely passed for the resale market. Yet, many resale sellers have been slow to adjust to this new reality. Unlike builders, they often remain resistant to offering closing cost assistance or creative financing incentives. It’s unclear why this persists, but a quick comparison of resale listings with those in the new construction segment reveals a stark contrast in strategy.

Builders have been aggressive in their use of financial incentives to drive traffic and reduce buyer friction. It’s now common to see builders contributing 3% to 6% of the purchase price toward closing costs, temporary or permanent rate buy-downs, and other creative tools that enhance affordability. These incentives not only increase buyer engagement but also reduce upfront costs and monthly payments—making their homes significantly more attractive to potential buyers, especially when compared to similarly priced resales.

Ironically, resale sellers are often quick to reduce their asking prices in an effort to stimulate buyer interest, yet overlook the more impactful approach of reallocating that same price reduction toward buyer costs. Consider this example: A seller lists a home at $800,000 with 10% down. Instead of reducing the price to $780,000, the seller could offer $20,000 toward the buyer’s closing costs or rate buy-down.

Let’s break that down:

• At $800,000 with 10% down, the buyer puts down $80,000.
• At $780,000, the buyer puts down $78,000—a $2,000 difference.
• The monthly mortgage savings from the $20,000 price reduction might equate to around $150/month.
• However, if the $800,000 seller contributes $20,000 toward costs, the buyer avoids that amount in out-of-pocket expenses.

To recoup the $18,000 in upfront savings (after adjusting for the $2,000 larger down payment), the $780,000 buyer would need approximately 120 months—ten years—of $150/month savings to break even, not accounting for the time value of money. Clearly, the incentive strategy is more compelling from a financial standpoint.

This isn’t a novel concept. Prior to 2022–2023, it was standard practice in many markets. Builders quickly reverted to this proven strategy as market conditions shifted. It may now be time for resale sellers to do the same—to “walk like a builder” and employ the tactics that have long proven effective in driving buyer decisions.