If you’re cutting your price to chase the new builds down the road, you will keep losing, because price is not what you’re losing to. A buyer walking out of a model home and into yours is not comparing two asking prices. They’re comparing what each house costs them to own on day one, and the builder is stacking that side of the scale on purpose. Once you can see what’s actually on the scale, you can put something on your side of it.
Your listing has an asking price. Theirs has an asking price plus a pile of money attached to it, and the buyer sees the whole thing as one number.
Nationally, 38 percent of builders cut their prices in September, the average cut was 6 percent, and 66 percent are paying incentives. That’s the highest share of builders using incentives since last December, and those are the National Association of Home Builders’ own September numbers, not a rumor from the model home.
So when your agent says the market is slow, that’s not what’s happening on your street. What’s happening is that the competition brought a checkbook.
Six things. Only two of them are about price. That is why cutting yours keeps not working.
More than you think. And there is a legal ceiling on it, so know your number before you offer anything.
A seller is allowed to contribute toward a buyer’s costs, and the buyer’s loan decides how much. On a conventional loan it is 3 percent if they put less than 10 percent down, 6 percent if they put 10 to 25 percent down, and 9 percent above that. FHA allows 6 percent. VA allows 4 percent. Those are Fannie Mae, Freddie Mac, HUD and VA rules, not your agent’s opinion, and the buyer’s lender will confirm the exact figure in one phone call.
One catch that trips people up: you can only cover the buyer’s actual costs. If the cap works out to $18,000 and their closing costs are $7,000, you can pay $7,000. It is not a cash gift, it is a bill you pick up.
Inside that ceiling you can do exactly what the builder does. Buy their rate down. Pay their closing. Both. And here is the part most sellers never hear: the same dollar does more as a rate buydown than as a price cut, because it lands on the monthly payment instead of on a number nobody feels.
Be honest with yourself about these, because pretending otherwise is what keeps a house on the market for six months.
You cannot make your house new. You cannot hand someone a ten year structural warranty. You cannot promise a roof and an air conditioner nobody will think about for fifteen years. If your house is thirty years old with a twenty year old roof, no credit closes that gap for a buyer who was standing in a brand new kitchen an hour earlier.
That is not a reason to give up. It is a reason to stop selling against them, and start selling to the buyer who does not want a new build in the first place. That buyer exists, and they are not shopping on the same street.
Not a little under. Clearly under, so the comparison is obvious in the first five seconds. A buyer who has to do math walks away. This is the fastest way to move it, and it usually costs less than three more months of payments.
A rate buydown, closing costs, or both, inside the caps above. Ask the buyer’s lender for the exact number before you offer anything, because going over it can cost you at the appraisal.
A big lot. Mature trees. A finished pool. No HOA. Five minutes from something instead of twenty. New construction goes where the land is cheap, which is usually the edge of town. Lead with what they had to give up.
If the house needs work you can’t fund, or you can’t wait the market out, this is where I come in. I’ll tell you what that looks like and what it costs you. And if listing it is the better answer, I’ll tell you that too.
I’m Robert. I’ve spent years doing this, buying, fixing, and figuring out the honest way through situations like yours. If something here didn’t quite fit your house, or you just want to talk it through with a real person before you decide anything, reach out. No pressure, no obligation, and it won’t cost you a thing to get a straight answer.
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