Should I Offer Concessions or a Rate Buydown to Sell My Home?

by Devin Beck

"Should we just drop the price again?"

That's usually the question.

But lately I've been asking a different one.

What's actually stopping the buyer?

Because a lot of buyers right now love the house.

It's the monthly payment they can't get past.

And a price cut is a pretty weak tool for fixing a monthly payment.

If you're selling in Centennial, Greenwood Village, Lone Tree, Littleton, Highlands Ranch, Parker, Castle Rock or anywhere in the South Denver Metro, here's how I'd think about concessions and rate buydowns, and when they beat a price cut.

The Short Answer

Should you offer concessions or a rate buydown to sell your home?

Sometimes, yes.

If buyers are passing on the house itself, price is usually the fix.

If buyers like the house but the payment doesn't work, a seller credit toward a rate buydown or closing costs can do a lot more for them than the same dollars off the price.

For you, the cost is often similar.

For the buyer, the difference can be hundreds of dollars a month.

Concessions Are Normal in Denver Right Now

If you're worried that offering a concession looks desperate, it doesn't.

It looks like the market.

Redfin found sellers gave concessions in 58.4% of Denver-area home sales in the three months ending August 31. Nationally, it was 44.7%, the highest August share since at least 2020.

Cooper Thayer's analysis of September REcolorado closings found 63.6% of transactions included seller concessions.

And in The Denver Gazette, Re/Max broker Landin Smith estimated around 66% of listings are showing some concessions now, compared with about 37% two years ago.

DMAR's October report put it plainly. Rate buydowns, seller-paid concessions and adjustable-rate loans are "all on the negotiating table right now," and sellers who build those options into their pricing strategy "will find a ready audience."

Why the Monthly Payment Matters So Much

Rates are the reason.

Freddie Mac's 30-year fixed rate averaged 7.32% the week of October 22. That's down from 7.40% the week before, but up from 6.19% a year ago.

Yahoo Finance called it some of the highest mortgage rates in three years.

So buyers are doing the math on every house.

One California lender told Yahoo Finance: "At the end of the day, the people that I work with very rarely care about the price of the house. What they care about is that monthly payment."

That's the opening for a seller.

What a Concession Actually Is

A seller concession is money you agree to put toward the buyer's costs at closing.

It usually shows up as a credit, and it can go toward things like:

The buyer's closing costs and prepaids
A temporary rate buydown, like a 2-1 buydown
A permanent rate buydown, where discount points lower the rate for the life of the loan
Repairs the inspection turned up

Your price stays the same on paper. The money comes out of your proceeds at closing.

Price Cut vs. Rate Buydown: The Math

Here's a simple example.

Say your home sells for $650,000. The buyer puts 20% down and borrows $520,000 on a 30-year loan at 7.32%.

Their principal and interest payment is about $3,572 a month.

Option 1: Cut the price by about $12,300.

The loan drops by about $9,800.

Their payment drops by about $68 a month.

Option 2: Give a credit of about $12,300 for a 2-1 buydown.

A 2-1 buydown lowers the rate by 2 points in year one and 1 point in year two, then it goes back to the original rate.

Year one at 5.32%: about $2,894 a month, saving about $678 a month
Year two at 6.32%: about $3,225 a month, saving about $347 a month
Year three on: back to about $3,572

Roughly the same dollars from you.

About ten times the monthly relief for the buyer in year one.

To be clear, that's simple payment math, not a quote. Lenders price buydowns differently, and the exact cost depends on the loan.

A permanent buydown works differently. Yahoo Finance ran an example where a $10,000 seller credit on a $400,000 home with 20% down permanently lowered the rate to 6.75% and saved about $135 a month, compared with about $70 a month from a $10,000 price cut.

And here in Denver, Compass agent Marcy Eastman told Yahoo Finance about sellers who offered $25,000 to the buyers of their $1.15 million home. The buyers used it to buy their rate down to 5.99%.

Which One Should You Offer?

Here's how I'd sort it out.

What you're seeing	What it usually means	The lever I'd look at first
Few showings	Buyers are skipping it online	Price, photos, positioning
Showings, but buyers pick other homes	Value doesn't stack up	Price or condition
Buyers like it, but the payment scares them	Financing is the hurdle	Rate buydown credit
Buyers are short on cash to close	Upfront costs are the hurdle	Closing cost credit
Inspection turned something up	Repairs are the hurdle	Repair credit or fix it

A 2-1 buydown can help a buyer who expects their income to grow or plans to refinance if rates drop.

A permanent buydown helps a buyer who plans to stay put.

A closing cost credit helps a buyer who has the income but not the cash.

The buyer's lender can run all three. That conversation is worth having early.

(Need the bigger picture on why your house is sitting? Start with Why Isn't My House Selling? 7 Reasons in Today's Denver Market.)

Know the Limits

Loan programs cap how much a seller can contribute.

Conventional (Fannie Mae): 3% of the price or appraised value if the buyer puts down less than 10%, 6% with at least 10% but less than 25% down, and 9% with 25% or more down, for a primary home or second home
FHA: up to 6% of the sales price
VA: concessions are capped at 4% of the home's reasonable value. VA doesn't count the buyer's normal closing costs or customary discount points toward that 4%

On a $650,000 home, 6% is $39,000. So most of the credits we're talking about fit easily.

Anything over the limit doesn't just disappear. Lenders treat it as a reduction to the price. So it's worth checking with the buyer's lender before you agree to a big number.

How I'd Use Concessions Without Giving Away the Farm

1. Lead with the payment, not the credit.

"Ask about a seller-paid rate buydown" in your marketing gets a buyer's attention. "Payments in the $2,800s for year one" gets even more. (Have a lender run real numbers first.)

2. Keep it flexible.

I like offering a credit "toward closing costs and/or a rate buydown." Let the buyer and their lender decide what helps most.

3. Don't stack discounts by accident.

Redfin found 15.8% of U.S. homes that sold in August had both a price drop and a concession. Sometimes that's necessary. But decide on purpose.

4. Watch your net, not just your price.

A $650,000 sale with a $15,000 credit and a $635,000 sale with no credit can look different on paper and feel similar in your pocket. The net proceeds checklist in Does Downsizing Actually Save Money? works for any move.

5. Price right first.

A concession won't save a house that's priced well above the market. Here's what price cuts really cost sellers, and how to price it right the first time.

And If You're Thinking About Waiting?

That's fair too.

Some sellers would rather pause than negotiate.

I'll cover whether to pull your home off the market for the holidays in the next post in this series.

And if you're not sure you even need to move, start with Should I Stay, Renovate or Move?

Free: Fall 2026 South Denver Seller's Guide

Thinking about listing this fall or early next year? My free Fall 2026 Seller's Guide walks through prep, pricing, timing and what to expect in today's market.

Get the Free Seller's Guide

Want to see your real numbers? Ask me for a free home value and net proceeds analysis, with and without a concession. No pressure, no sign in the yard. Call or text 720-935-7537.

Already listed with another agent? Bring these questions to them. They know your home best.

Frequently Asked Questions

Should I offer concessions or lower my price?

It depends on what's stopping buyers. If they're passing on the house, price is usually the fix. If they like the house but the monthly payment doesn't work, a credit toward a rate buydown can lower their payment far more than the same amount off the price, often at a similar cost to you.

What is a 2-1 buydown?

A 2-1 buydown is a temporary rate reduction, often paid for by the seller. The buyer's rate is 2 percentage points lower in the first year and 1 point lower in the second year, then it returns to the original rate for the rest of the loan.

How much can a seller contribute to a buyer's closing costs?

It depends on the loan. Fannie Mae allows 3%, 6% or 9% of the price for a primary home, based on the down payment. FHA allows up to 6%. VA caps concessions at 4% of the home's reasonable value, not counting normal closing costs and customary points.

Are seller concessions common in Denver?

Yes. Redfin found sellers gave concessions in 58.4% of Denver-area home sales in the three months ending August 31, 2026. A separate analysis of September REcolorado closings by Cooper Thayer found 63.6% of transactions included seller concessions.

Is a rate buydown better than a price cut?

For the buyer's monthly payment, often yes. In a simple example on a $650,000 home with 20% down at 7.32%, about $12,300 toward a 2-1 buydown saves the buyer about $678 a month in year one. The same amount off the price saves about $68 a month.

Selling When Homes Are Sitting: A South Denver Seller's Series

Why Isn't My House Selling? 7 Reasons in Today's Denver Market
Price It Right the First Time: What Price Cuts Really Cost Sellers
Should I Offer Concessions or a Rate Buydown to Sell My Home? (you're reading it)
Should I Pull My Home Off the Market for the Holidays? (coming soon)

Let's Find the Lever That Works

If you're in Centennial, Greenwood Village, Lone Tree, Littleton, Highlands Ranch, Parker, Castle Rock or anywhere in the South Denver Metro, I'm happy to run the numbers with you.

Price cut or credit.

Buydown or closing costs.

What you'd actually walk away with.

No pressure.

Just the math.

Sometimes the smartest discount doesn't touch the price at all.

Stay. Renovate. Move.

Devin @ The W Real Estate Group

This article is for general information only and isn't legal, tax, lending or financial advice. Market figures are from the sources below as of October 2026 and will change. The payment examples are simple principal-and-interest math, not loan quotes; actual buydown costs, rates and eligibility depend on the lender and loan program. Talk with a lender before offering or accepting a buydown. If your home is currently listed with another brokerage, please talk with your listing agent first.