📊 The 5 Financing Moves for Buyers Waiting on Rates

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Everyone keeps saying, "I'm waiting for rates to come down." Mortgage rates are sitting around 6.5% — the highest they've been all year. But here's what almost nobody actually tells buyers. Very few people are really paying the advertised rate anymore.

The smartest buyers and the agents helping them are using permanent buy-downs, temporary buy-downs, adjustable-rate mortgages, builder incentives, assumable loans, and negotiated refinance strategies to save hundreds of dollars every month — sometimes $600+ per month during the critical first years.

If you're only shopping houses, you're only doing half the job. You have to shop the financing too. Otherwise you're leaving serious money on the table — and some of your clients aren't pulling the trigger because you never gave them the payment they needed. Today we walk through the five specific financing plays every agent should have in their back pocket, the seller-concession angle that beats a price drop, and the assumable-mortgage goldmine hiding inside almost every expired-listing appointment you go on this month.

Before the tactics — one mindset shift that changes everything.

There are two things dominating the current buyer conversation that no agent, no buyer, and no seller can do anything about. Interest rates. And house prices. Both are politicized. Both are subject to macro forces bigger than any of us. Both consume more emotional energy than they deserve.

Let them go. Not because they don't matter — they do. But because you can't move them. What you can move is the third variable buyers actually care about — the payment.

Here's a fact that reframes the entire industry conversation. According to recent auto data, only about 6% of cars over $100,000 are paid for in cash. The other 94% are financed. That means when someone is buying a $150,000 luxury vehicle, they're not asking what does it cost. They're asking what's the payment.

The same dynamic applies in real estate. Buyers care about the payment. Your job is to engineer the payment — not to argue about the rate.

For today's math, we're going to use the same example throughout so you can carry it into conversations with your buyers. Adjust the numbers to your market, but the mechanics are identical everywhere.

That's the baseline. When your buyer says "I want rates to come down," this is the payment they're actually reacting to. Now let's engineer it down.

Most buyers and their agents focus exclusively on negotiating the purchase price. Smart buyers negotiate the financing — with discount points, also called a permanent rate buy-down.

The mechanics — one discount point costs 1% of the loan amount. On our $480,000 mortgage, one point is about $4,800.

Important nuance. One discount point does not drop the rate by 1%. Different lenders have different formulas, but most points drop the rate somewhere between a quarter point and three-quarters of a point. So one point on a 6.55% rate might get you to 6.25% — not 5.55%. Set that expectation clearly with buyers before they start doing the math.

Here's where permanent buy-downs get powerful. The buyer doesn't have to pay for the discount points themselves. In fact, they usually shouldn't. The most useful application of buy-downs is on the listing side, and it's the single most powerful alternative to a price reduction.

Scenario: your listing is at $600,000 and it's sitting. The market is telling you it might be worth $575,000. Traditional move — you have the price-reduction conversation with the seller.

Better move — you keep the price at $600,000 and structure the seller concession instead. "Let's give the buyer $25,000 of your money toward closing costs and rate buy-down at full list price." Now do the math for the seller. That $25,000 concession, deployed as points on the buyer's loan, might buy the rate down from 6.55% to something in the low 5s — dropping the buyer's payment by $400-$500/month.

Then you advertise it aggressively:

Your listing just jumped to the top of the buyer's showing list. In markets like Texas, Florida, and Arizona where inventory is deep, this single move can put your listing on top of 20 competing homes — because none of the others advertised a payment. You did.

This is exactly what builders have been doing for decades. It's the reason a new-construction home at $725,000 can compete effectively with your resale at $600,000. The builder is packing extra money into the purchase price and using it to buy down the interest rate. The purchase price is higher. The payment is lower. That's what buyers respond to.

You can do the exact same thing with any resale seller who's willing to structure the concession instead of cutting the price. Diminishing structures work even better — "$25K contribution at $600K, $10K at $585K, $0 below $580K." That incentivizes the buyer to bring a strong offer instead of negotiating you down.

Permanent buy-downs are useful but expensive per dollar of payment reduction. Temporary buy-downs are dramatically more efficient for the first years of ownership — and they pair perfectly with the plan to refinance if rates drop.

Here's how a 2-1 buy-down works. The mortgage is written at the full rate — 6.55% in our example. But at closing, the seller (or builder or occasionally the buyer) deposits money into a special buy-down account. Every month, that account subsidizes the difference between the buyer's reduced payment and the lender's full payment.

Over the first two years, the buyer saves approximately $9,700 in payments. If rates drop during those two or three years — which is exactly when most agents and buyers are expecting some relief — the buyer refinances into a permanent lower rate before the buy-down expires. Best-case, they never hit the year-3 payment.

Here's the conversation to have with the buyer who's still holding out. If your market appreciates just 5% over three years — a conservative assumption in most areas — a $600,000 home is worth $694,575 by year three. That's a $94,000+ increase in purchase price the buyer is going to pay if they wait.

Now compare that to the interest they'd pay by buying today. Even at 6.55%, three years of interest on a $480,000 loan is roughly $90,000 in interest — of which they've built roughly $20,000 in equity. The appreciation dwarfs the interest cost in almost every scenario.

We built the Cost of Waiting interactive calculator on Harris Real Estate Daily specifically for these conversations. Subscribe (free), go to the Interactives tab in the top-right, and you'll find it. Send the link to your buyers. They can plug in purchase price, interest rate, appreciation assumption, and time horizon. The math tells the story more convincingly than any of your prose ever will.

Buying a home is a home run 99% of the time — and always has been. The math on waiting is almost always worse than the math on buying today, once you factor in appreciation and payment engineering.

ARMs got a bad reputation in the 2008-2010 crash, and the reputation stuck. Today's ARMs are structurally different — better underwritten, better regulated, and often the best value in the market. Don't skip past them by reflex.

Common current options: 5-year ARM, 7-year ARM, 10-year ARM. Fixed rate for the first 5, 7, or 10 years, then it adjusts.

Ask your buyer three questions:

If they typically move every 5-10 years — which describes most American households — why would they pay a premium for a 30-year fixed rate they're not going to keep?

Example: a 5-year ARM might be available at 5.9% versus the going 6.55% fixed. That's a ~$200/month savings on our example loan. Over five years, that's $12,000 saved — before any rate movements.

Local credit unions are often the hidden goldmine here. Ask around. A coaching client recently found a 10-year fixed portfolio product at a local credit union, priced almost a point better than the going 30-year rate. Fixed for 10 years — longer than most people stay in a house. Portfolio products from credit unions and community banks often outperform national lenders because they're not packaging loans for resale.

Bonus tip. You can still buy down the rate on an ARM. You can combine most of these tactics — permanent buy-down + ARM + seller concession + eventual refinance — into a single strategy that produces dramatically better payment outcomes than any one tactic alone.

If you haven't been walking through new-construction communities in your market this year, start immediately. Builders are often your biggest competition to resales — because they're selling on payment.

Common builder offerings right now:

Here's the specific move to replicate their advantage. Go to the builder communities in your market. See what payment they're marketing. Ask which third-party lender they're using. Then call that lender directly.

"Hey — I see you're doing X with [builder]. I have a $600,000 resale listing coming up. Can we structure something similar?"

Chances are extremely high the lender will say yes. Now you have the same competitive edge as new construction for your resales. In markets where you're competing against significant new-construction inventory, this move alone can be the difference between a stagnant listing and a fast sale.

Two specific items to check before your buyer signs anything.

One — is there a prepayment penalty? Most standard loans don't have one. But some of the more aggressive buy-down products come with prepayment penalties buried in the fine print. A former listing client of ours had to relocate within the first year of ownership — and discovered a 4-5% prepayment penalty on the mortgage balance. On a $400,000 loan, that's an unexpected $16,000-$20,000 hit at closing. We were able to negotiate it down to about 1%, but the cleanest path is to not have the penalty in the first place. Ask the question at loan application. Read the disclosures. Push back on any product that has one.

Two — ask the lender: will you offer a low-cost or free refinance if rates drop? Many lenders in the current market have built-in refi packages specifically to stimulate current-year transactions. If your buyer knows they can refi cheaply when rates drop, the 6.55% today becomes much less scary. Get the commitment in writing when possible. Even a verbal understanding from the loan officer is better than nothing.

One important truth to deliver to every buyer who's waiting for rates to come down. Housing Wire and the industry's most credible mortgage analysts — Logan Mohtashami and others — have been increasingly direct about this. When buyers say they're waiting for rates to come down, most of them mentally have pandemic-era rates in their heads. 3.5%. 3%. 2.8%.

Those rates are not coming back. Not in your lifetime. Not in your grandchildren's lifetime.

The confluence of monetary conditions that produced those rates was a once-in-multi-generation event. Rates in the mid-to-high 5s are realistically achievable with buy-downs and creative structuring. Rates in the high 4s are achievable with builder incentives and aggressive strategy. Below that is fantasy.

If your buyer is holding out for 3.5%, they're going to be holding out forever. The kindest, most professional move you can make is to gently deliver that truth and pivot the conversation toward payment engineering instead.

Now the bonus strategy that most agents completely overlook — and that produces sales gold at almost every expired listing appointment right now.

Every seller who took out a mortgage during 2020-2021 has an interest rate somewhere between 2.5% and 3.5%. Millions of Americans are sitting on these loans. Most of them are FHA or VA — both of which are assumable.

Here's the mechanic. A buyer can assume the seller's existing mortgage at the existing rate and existing term. Yes — that means a buyer today can take over a 3% mortgage from 2021, with roughly 25 years remaining (since 5 years have already been paid down).

Example: $600,000 house. Seller has $200,000 in equity, $400,000 remaining balance on a 30-year fixed at 3%. Buyer assumes the $400,000 loan at 3%, brings $200,000 to cover the seller's equity. Payment on that $400,000 at 3% is dramatically lower than any current market rate could produce.

The problem is usually the down payment gap. Most buyers don't have $200,000 lying around. Two paths solve this:

Here's the move that turns this from theoretical into commission-generating.

On every single expired listing appointment you go on this month, ask the seller two questions.

If they say some version of "3%, 3.5%, 2.75%," you have absolute sales gold in front of you. That seller doesn't need to lower the price. They don't need to change condition. They just need to let the market know that the mortgage is assumable at 3%.

Advertise it aggressively:

Buyers reading that headline — "3% assumable mortgage available on this property" — will show up in droves. The house sells at asking price. The seller nets what they wanted. You get the commission and the referral chain that follows.

And here's the follow-up move: you might want to buy that listing yourself. If you have the down payment and the rate is that low, you're being handed a generational deal.

One programming note before we close. Tim and Julie just published The Dorado Beach Insider — a full-length physical book they wrote for the Dorado Beach community in Puerto Rico, where they're returning to production this summer.

The book is intentionally not about real estate. It's about the community — restaurants, schools, tax planning (Puerto Rico's Act 60), hurricane preparation, insider knowledge that helps residents and relocators navigate the community better. It's positioning them as the trusted information source long before real estate ever comes up in conversation. It's the community-intelligence flywheel we've been coaching around for years, now built into a shipped product.

Response has been much stronger than anticipated. Which is why Tim and Julie are exploring whether to offer a version of this service to a limited number of Premier Coaching and Elite clients — building custom insider books for other high-end communities. New Albany Country Club Insider. Aspen Insider. The Hamptons Insider. Whatever your target market is.

If this is something that vibes with you, the first step is to buy and read the book on Amazon. It's about 51,000 words — a reasonable read. See what's possible. If you'd want something similar built for your community, text Tim directly at 512-758-0206 after you've read it. No lead form. No sales funnel. Just a real conversation between two people about whether it's a fit.

Rates aren't coming down to 3% anytime soon. Prices aren't crashing. Both of those obsessions are dead ends. The payment is the only variable you actually control — and there are more ways to engineer a payment today than at any point in your career.

Permanent buy-downs. Temporary buy-downs. Seller-paid points. ARM products. Builder financing structures. Assumable mortgages hiding in every expired listing appointment. Local credit union portfolio products. Combinations of all of the above.

If your buyer is stuck at "I'm waiting for rates," you have five specific tools to unstick them today — plus the assumable-mortgage bonus that could turn your next expired into your best listing of the year.

Stop letting buyers wait for rates that aren't coming. Engineer the payment instead. Advertise the seller concession or the assumable rate on every listing. Ask the mortgage question at every listing appointment.

Get to work.

Ready to stop guessing and start producing?

💼 Build wealth with Tim's eXp team: whylibertas.com/harris
📲 Elite Coaching — text Tim directly: 512-758-0206

If you asked "what's your current mortgage rate?" on every expired listing appointment for the next 90 days — how many 3% assumable-mortgage listings do you think you'd walk into that nobody else in your market is even asking about?

— Tim & Julie Harris

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