What Today’s Home Sellers Need to Know About Buyers

If you’re thinking about selling your home, you may be watching mortgage rates and wondering how they could affect your sale.

Higher rates don’t just impact buyers. They can also change what sellers need to do to attract attention and compete for today’s buyers.

When mortgage rates are higher, buyers tend to pay even closer attention to their monthly payment. That means the conversation isn’t always just about the price of the house anymore. Bu

yers are also looking at closing costs, interest rates, incentives and what they’re getting for their money.

And that’s where sellers may be competing with something they didn’t have to think as much about a few years ago: new construction incentives.

Builders Are Finding Ways to Make the Monthly Payment More Attractive

New construction has been holding up somewhat better than existing-home sales in the current higher-rate environment.

One reason is the incentives builders can offer buyers.

According to Realtor.com, nearly 1 in 5 (18.8%) newly built homes are advertised with some type of buyer incentive. One of the more common incentives is a mortgage rate buydown.

A rate buydown allows a builder to pay certain upfront costs to help reduce a buyer’s mortgage rate and monthly payment. For buyers focused on affordability, that can make a significant difference.

Some builders are offering mortgage rates below 6%, and in certain cases, considerably below that.

So if you’re selling an existing home, it’s important to understand what your competition is offering, not just what other resale homes are listed for.

Sellers Have Options, Too

The good news is that sellers aren't necessarily at a disadvantage simply because builders are offering incentives.

Sellers can contribute toward a buyer’s rate buydown too, depending on the buyer’s loan program and the details of the transaction.

But that doesn’t mean every seller should automatically offer a rate buydown.

There are several ways to make a home more appealing to buyers. Depending on the property and the competition, that could mean adjusting the price, helping with closing costs, addressing certain repairs, improving the presentation of the home or highlighting features that a new construction home doesn’t offer.

Location can be a major advantage, too.

As Joel Berner, Senior Economist at Realtor.com, explains:

“Sellers of existing homes are facing a lot of competition from the new-home space. . . so sellers should highlight the local amenities of their neighborhoods in contrast to the more suburban or exurban communities where many new homes are built.”

That’s an important point.

An existing home may offer mature landscaping, an established neighborhood, nearby schools, restaurants, parks, shopping, shorter commutes or other conveniences that buyers won’t necessarily get with a brand-new home.

The key is knowing what makes your home worth choosing.

Pricing Your Home for Today’s Buyer Matters

Builders have also been adjusting their pricing and incentives based on what buyers can afford and what the market demands.

That creates another consideration for homeowners who are preparing to sell.

Robert Dietz, Chief Economist at the National Association of Home Builders, puts it this way:

“. . . existing homeowners now have to do the price discovery that builders have been doing since 2022.”

In other words, sellers need to pay attention to what buyers are actually willing and able to pay today, not simply what a similar home may have sold for several years ago.

That doesn’t automatically mean dropping your price or offering a large concession.

It means taking a realistic look at your competition and making sure your home is positioned accordingly.

Your Local Competition Matters

This is where the national conversation about mortgage rates and new construction only goes so far.

The amount of new construction, and the incentives builders are offering, can vary significantly from one area to another.

That’s why your selling strategy should be based on what is happening in your specific DFW market, including the homes buyers are comparing yours against.

If you’re considering selling, I can help you look at the competition, current buyer expectations and the options available to position your home effectively.

Call me, Teresa Hill, for all your real estate needs.

*Information sourced from National Association of Home Builders, Realtor.com, NAR, & Keeping Current Matters