Stop Selling the Price. Start Selling the Payment: A New Strategy for Metro Atlanta Home Sellers

With mortgage rates climbing again, many potential homebuyers are saying they will wait until next year, hoping rates come back down. But what if you could get the benefit of a lower mortgage payment today? Would you buy?

For years, higher mortgage rates have been viewed primarily as a buyer’s problem. It’s time to change that conversation. With homes taking longer to sell across Metro Atlanta, mortgage rates have become a seller’s problem, too.

Think about how consumers buy just about everything else. When shopping for a car, most people want to know, “What will my monthly payment be?” The automobile industry has understood this for years. Look at car advertisements, and you’ll often see a monthly payment featured more prominently than the vehicle’s total price.

Credit cards offer another example. Many consumers carry balances with interest rates exceeding 20%… yet continue using their cards because they believe they can manage the monthly payments. Whether that’s always a wise financial decision is another question. The point is that monthly affordability often drives purchasing behavior.

So why do we focus so heavily on a home’s price when the monthly payment may determine whether a buyer can afford it???  Stop Thinking Price. Start Thinking Payment.

Consider a $500,000 home with a buyer putting 5% down. The resulting mortgage is $475,000. At a 7.50% 30-year fixed rate, the principal and interest payment is approximately $3,321 per month.

If the seller cuts the price by $15,000 to $485,000, the buyer’s loan drops to $460,750, and the monthly payment falls to approximately $3,221. The seller sacrifices $15,000, but the buyer saves only about $100 per month.

There may be a better option: a 2/1 temporary mortgage rate buydown.

Keeping the price at $500,000, an eligible seller contribution could temporarily reduce the buyer’s effective interest rate:

• Year 1 at 5.50%: $2,697 per month, saving $624.
• Year 2 at 6.50%: $3,002 per month, saving $319.
• Year 3 onward at 7.50%: $3,321 per month.

That’s approximately $11,316 in total payment assistance over two years, compared with a $15,000 price reduction that saves roughly $100 monthly.

Taxes, insurance, mortgage insurance and HOA dues are additional. Buyers must qualify at the full note rate, and loan-program rules and contribution limits apply.

Today’s sellers are competing on more than location, square footage and price. They’re competing on monthly payment.

Before making another $10,000 or $15,000 price reduction, ask your Realtor and mortgage professional to run the numbers. A strategic concession may make a home more affordable without sacrificing as much of the asking price.

If buyers are waiting for next year’s rates, perhaps the better question is: Why wait if a seller can help make the payment more affordable today???