• Sellers are cutting prices. Here’s how buyers can make the most of it.

    Price cuts are showing up on listings again, and more sellers are accepting that their first asking price missed the mark. In many California neighborhoods, sellers are adjusting sooner than they did when inventory was tight. For buyers, that creates room to negotiate. It also raises a bigger question: how should your financing fit into the plan?

    Why sellers are cutting prices

    Most sellers who cut their price didn’t overprice on purpose. Many listed at a number that matched the market a few months earlier, then watched showings slow down and offers stay quiet. For some, a price cut has become the cost of getting the sale done.

    Across many local markets, the result is a steady stream of price reductions. That tells you sellers are competing for buyers who have more choices than they did recently. The pattern is uneven, though. A well-priced home in a popular neighborhood can still get several offers in a week.

    Where buyers have the upper hand when prices are cut

    When homes sit on the market longer, buyers have time to compare and to walk away. Sellers who need to move often respond to a slow stretch with a price cut rather than waiting another season.

    You can also ask for more than a lower price. Many sellers who want to close will agree to a seller credit toward your closing costs, or toward a rate buydown. Your strongest position comes from knowing what similar homes recently sold for, because that’s the number the appraiser will use too.

    Price cut, seller credit or rate buydown?

    This is where your loan strategy matters. A lower price, a seller credit and a rate buydown can each save you money, but they show up differently in your monthly payment and your cash at closing.

    A lower price reduces your loan amount for the life of the loan. A seller credit can cover closing costs, so you keep more cash in the bank. A buydown uses the credit to lower your interest rate, either for the first few years or for the full loan, which lowers your monthly payment.

    The right choice depends on how much cash you have, how long you plan to stay and what payment you’re comfortable with. Before you make an offer, ask your loan officer to run all three side by side. The sticker price doesn’t always tell you which deal is better. The Consumer Financial Protection Bureau has a helpful explanation of how points and lender credits work.

    Tips for buyers

    Start by checking how long each listing has been on the market and whether the price has already been cut. A home with a recent reduction may be more flexible, but a lower price alone doesn’t make it a bargain.

    Get fully pre-approved before you shop. When sellers are weighing several offers, a solid pre-approval and clean terms can carry as much weight as the price. If you’re buying your first home, here’s how I help first-time buyers get ready.

    Tips for sellers

    Price your home against what’s selling now, not what you hoped to get a year ago. Pricing it right from the start usually costs less than a series of price cuts, which can make buyers wonder what’s wrong with the house.

    If you’re selling so you can buy your next home, the timing gets trickier. Buying before you sell can take some of the pressure off your sale.

    Common questions

    Does a price cut mean I should offer even lower?

    Not always. Some homes are cut to the right price, and a lowball offer can cost you the house. Look at recent sales of similar homes first, then decide with your agent how much room there really is.

    What is a seller credit?

    A seller credit is money the seller agrees to put toward your costs at closing. It’s written into your purchase contract, and loan programs set limits on how much you can receive.

    What is a rate buydown?

    A buydown is an upfront payment that lowers your interest rate. A temporary buydown lowers it for the first year or two, and a permanent buydown lowers it for the life of the loan. A seller credit can often be used to pay for it.

    Make the most of a buyer’s market

    Today’s buyer advantage is real, but it isn’t a free pass to lowball every listing. In this market, realistic pricing, clean offers and solid financing carry more weight than they did when homes sold in days. If you’d like to see how a price cut, a seller credit and a buydown compare on a home you’re considering, book a strategy call and I’ll run the numbers with you.

  • Can you buy your next home before you sell this one?

    Finding the right home before your current one sells creates a real timing problem. In California, where good homes often get multiple offers, waiting for your sale can mean losing the house you want. A buy before you sell loan can help qualified homeowners purchase first and sell afterward. It takes the pressure off, but it needs a careful plan.

    What is buy before you sell financing?

    Buy before you sell is a broad term for loan options that let you use your buying power before your current home sells. Depending on the program, the money may come from your existing equity, a short-term bridge loan or another structure.

    Some programs also help you get your current home ready to sell, or coordinate the timing of your listing. Features, eligibility and costs vary by lender and program, so it’s worth comparing more than one.

    How buy before you sell usually works

    Most programs follow the same basic steps. First, we look at what your current home is likely to sell for and what you still owe. That tells us how much equity you have to work with.

    Next, that equity is used to fund the down payment on your new home, either through a bridge loan, a HELOC or a dedicated program. You buy and move in. Then you sell your old home, and the proceeds pay off the short-term financing.

    Why homeowners choose it

    The biggest benefit is flexibility. You may be able to make an offer without a home-sale contingency. Sellers usually prefer those offers, which matters when you’re competing with other buyers.

    You can also move on your own schedule and get your old home ready for the market once it’s empty. An empty, clean home is easier to show and often easier to sell. For many families, it also means no temporary rental and no moving twice.

    What to watch out for

    You may carry costs on both homes for a while, and your current home could take longer to sell than you expect. Plan for that from the start, not after you’ve moved.

    Qualifying usually depends on your income, equity, credit, savings and the expected sale price of your current home. Before you move forward, review the repayment terms, fees and any sale deadlines with your loan officer. Ask what happens if your home doesn’t sell on schedule, and make sure there’s a backup plan.

    For a helpful overview of the home buying process, see the Consumer Financial Protection Bureau’s guide to buying a house.

    Is buy before you sell right for you?

    Buy before you sell financing can be a great fit if you have solid equity, steady income and a home that’s likely to sell in a reasonable time. It may not be the right move if your equity is limited, or if your budget can’t handle two housing payments for a few months.

    The structure has to fit your budget and your local market. I’ll look at your purchase, your sale and your financing together, so you can see whether this strategy makes sense before you commit.

    Common questions

    Is a bridge loan the same as buy before you sell?

    A bridge loan is one type of buy before you sell financing. It’s a short-term loan against your current home that covers the gap until it sells. Other programs work differently, so it’s worth comparing them.

    Does this work in California?

    Yes. In many California markets, good homes get multiple offers, so being able to make an offer without a sale contingency can make a real difference. Home values here also mean many homeowners have built up enough equity to qualify.

    What happens if my home doesn’t sell right away?

    That depends on the program. Some have sale deadlines, and you may carry costs on both homes until it sells. This is the most important thing to plan for before you start.

    Can I use a HELOC instead?

    Sometimes. A HELOC on your current home can cover the down payment on the next one if you intend to keep it as a rental property. Some lender have pre-payment penalties for early pay-off on these loans.

    How long does the process take?

    It varies by program and by how quickly you find your next home. Getting your financing lined up before you start shopping gives you the most room to move when the right house comes along.

    Let’s look at your numbers

    If you’ve found a home you love, or you’re starting to think about your next move, let’s talk through your options. Learn more about buying before you sell or book a strategy call.