Home Buyer Archives - Real Estate News and Commentary

May 29, 2025May 29, 2025

Mortgage Buydown or Price Cut?

Deep Dive Real Estate Podcast: What’s better for affordability, a Mortgage Rate Buydown or a Price Cut?

In today’s housing market, many buyers face a frustrating dilemma: even when home prices hold steady, rising mortgage interest rates can push monthly payments beyond reach. What once felt affordable at 4% interest can suddenly become unattainable at 7%, pricing buyers out despite having the income and down payment ready. With affordability shrinking, buyers are forced to make tough choices, walk away, settle for less, or find creative ways to make the numbers work. Most agents and buyers will focus on negotiating the price down, but there is a powerful and often overlooked strategy that can lower payments and mortgage costs over time. Depending on your situation, the question becomes, Mortgage Buydown or Price Cut?

What’s Better: Mortgage Buydown or Price Cut?

A mortgage buydown is when the interest rate on your home loan is lowered in exchange for an upfront payment, often made by a seller or builder concession. The lowering of the interest rate will reduce your monthly mortgage payments. It’s a way to make home buying more affordable, especially when interest rates are creeping higher.

When negotiating a home purchase, many buyers zero in on one thing: price. But here’s a financial truth that can save you thousands. Sometimes the better deal isn’t a lower purchase price, but a lower interest rate. Take a look at this example:

Example 1: Let’s say you’re eyeing a $400,000 home and have 20% to put down. The seller offers you one of two options:

• Option 1: A $3,200 price reduction
• Option 2: A seller-paid buydown that lowers your 30-year fixed mortgage rate from 7.00% to 6.75%

At first glance, $3,200 off the price might sound appealing. But if you do the math, the mortgage buydown actually lowers the monthly payment more than the price reduction, AND can potentially lower the cost of the loan over time.

Savvy buyers should always ask the lender to work out both scenarios to see actual numbers. The right mortgage strategy can turn seller generosity into lasting savings.

The bottom line

In a market where sellers are willing to offer concessions, smart buyers don’t just ask for a discount, they ask for financial leverage. A mortgage buydown can be a smart way to lower monthly payments and make a home more affordable, especially in a high interest rate environment. It stretches your budget without needing to negotiate a lower purchase price.

For sellers, offering a buydown can be a powerful incentive that helps attract serious buyers without reducing the home’s value. In a competitive market, it’s a win-win strategy that keeps deals moving and both parties satisfied.

By Dan Krell
Copyright © 2025

Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

Homes for sale.

May 10, 2025May 10, 2025

Private Listings and Home Buyers

Deep Dive Podcast: Private Listings and Home Buyers

Private Listings and Home Buyers.

When you’re buying a home, you expect your real estate agent to help you find the best property for your needs, not just the ones that happen to be listed by their brokerage. But what if your agent or their broker is quietly steering you toward private listings that benefit them more than you?

The Hidden Pitfalls of Private Listings. What Home Buyers Need to Know About Steering

It’s a real issue, and one that could cost you money, limit your choices, or worse, result in legal problems down the road. Let’s break down what’s going on, why it matters, and how you can protect yourself.

What Are Private Listings?

A private listing (also known as an office exclusive or pocket listing) is a property for sale that is not publicly listed on the Multiple Listing Service (MLS). Instead, it’s marketed privately, often only to clients of the listing brokerage.

While these can sound exclusive or enticing, private listings bypass market competition. That means less exposure, fewer eyes on the property, and potentially inflated prices.

Why Steering Toward Private Listings Can Be a Problem

When a buyer’s agent shows you only homes listed by their own brokerage, especially private listings, they may not be working fully in your best interest. That’s called steering, and it can come with serious consequences.

Here’s why:

Conflict of Interest
Agents have a fiduciary duty to act in your best interest. If they’re prioritizing their own brokerage’s listings, they may be putting their paycheck ahead of your needs.
You Might Overpay
Private listings aren’t exposed to the full market, which means there’s no competitive pricing pressure. Sellers can ask more, and buyers often have less leverage to negotiate.
Limited Inventory
If your agent is only showing you in-house listings, you’re missing out on better (and possibly more affordable) homes that are publicly available.
Lack of Transparency
Buyers may not realize they’re being steered unless they ask. If your agent isn’t disclosing the reason certain homes are being pushed, or why others are being ignored. That’s a red flag.
Legal and Ethical Risks
In some cases, steering may violate state laws, licensing rules, or even the Fair Housing Act, especially if decisions are influenced by the demographics of neighborhoods.

What You Can Do as a Home Buyer

Here’s how to take control of your home search and avoid being steered into a bad deal:

Ask Directly: “Are there any financial incentives for you or your brokerage if I buy this home?”
Request Full Market Access: Insist on seeing all available homes, not just private or in-house listings.
Check the Listing Source: Is the property listed in the MLS? If not, ask why.
Understand Dual Agency: If the brokerage represents both the seller and buyer, get full disclosure in writing, and know that your agent may be restricted in how much they can advocate for you.
Consider Independent Representation: A buyer’s agent from a different firm has no stake in the listing brokerage’s sales and may be more focused on your best deal.
Get Everything in Writing: From agency agreements to disclosures about who the agent represents, make sure you have documentation of all relationships and responsibilities.

Final Thoughts on Private Listings and Home Buyers
The home buying process is complex, but transparency should never be negotiable. If you feel you’re not getting the full picture, it’s okay to pause, ask hard questions, or even switch agents. The right home, and the right deal, starts with representation you can trust.

By Dan Krell
Copyright © 2025

Homes for sale.

April 3, 2025April 14, 2025

Myth-Busting, Home Selling Edition

Myth-Busting Home Selling Edition

The Home Seller Myth-Busting Guide – The Truth About Selling Your Home

Getting bad information can be costly when selling a home. Unfortunately there’s a lot of misinformation being spread about selling homes these days. Some from social media, and some even from real estate agents. Myth-busting requires you to be mindful of what you’re hearing from others and the media, including real estate agents! If something doesn’t sound right – question it, and if necessary get a second opinion.

Here’s the truth behind some of the most common myths:

Myth #1: You MUST Offer a Buyer’s Agent Commission, or Your Home Won’t Get Shown

There is no requirement for a seller to offer a Buyer Agent commission

❌ False: “You must offer Buyer Agents compensation or your home will not get shown”
✅ Truth: Buyer agents are obligated to show properties that fit their clients’ needs, regardless of seller compensation. There is no requirement to offer a set Buyer Agent commission in order to have buyers visit the property.

Myth #2: You Must Spend Thousands on Staging & Updates to Sell

❌ False: “All renovations will help you get more money for your home.”
✅ Truth: Not all renovations give a return on investment. Strategic, minor updates like cleaning and decluttering can be more effective.

Myth #3: The First Offer is Always the Worst Offer

❌ False: “The first offer is often too low, wait for a better offer.”
✅ Truth: Waiting too long can lead to lower offers over time. Serious buyers often act quickly.

Myth #4: You Should Overprice Your Home to “Test the Waters” & Lower It Later

❌ False: “Price your home high to see if you get a buyer, and you can always lower it.”
✅ Truth: Pricing it right from the start attracts serious buyers and better offers. Overpricing leads to longer market times and price reductions.

Myth #5: There’s a “Secret” Way to Bring in Buyers

❌ False: “Exclusive buyer pools” are better than the MLS.”
✅ Truth: The best exposure comes from MLS listings and strategic marketing. The MLS spreads your listing worldwide—providing the most exposure to home buyers.

Myth #6: All Agents Are the Same

❌ False: “There is no difference in what agents bring to the table.”
✅ Truth: Experience and marketing strategies vary. An experienced, full-time agent ensures a smooth process and maximized profit.

The Bottom Line

Getting the correct information from real estate agents is key in making decisions that are in your best interest. Exercising due diligence when interacting with potential listing agents can help you see through the deceptions and obfuscations.

What’s your home worth?

By Dan Krell
Copyright © 2025

February 13, 2024February 13, 2024

Low inventory home buyer strategies

I’ve written about the low housing inventory phenomenon many times over the course of a decade. I’ve also written about low inventory home buyer strategies in the past. Yes, this has been an issue for that long, although it has ebbed and surged. One consequence has been that many potential homebuyers have stayed away from the market, waiting for conditions to improve.

Low inventory home buyer strategies

Housing market conditions have left many homebuyers frustrated over the last few years. The outlook isn’t that much better this year. Housing inventory shortages will likely continue to hold buyer activity in check.

Although it is expected that many more homes will be sold this year compared to last, the pent up buyer demand will impact the average number of homes on the market at any given time. In plain language, on the current trajectory homes will continue to sell quickly and at appreciating prices.

Are you one of those still waiting for the housing market conditions to tip in favor homebuyers? Or are you just entering the market? Regardless, low inventory home buyer strategies, such as being prepared and proactive, will help you on your home buying journey.

If you’re paying cash for the home, make sure you have access to your funds (or prepared to get access) prior to entering into a contract. Having assets doesn’t necessarily mean it’s liquid or easily accessed. Ask for the process to get your funds from the institution holding your assets.

If you’re getting a mortgage, get preapproved. Having a preapproval will not only help you create a buying budget, it will give you a head start on the buying process. The preapproval letter attached to your offer tells the home seller the bank will give you loan based on the information they reviewed.

If you’re planning on working with a real estate agent, choose your agent before you start visiting open houses. Not knowing if and with whom you’re working can create an unnecessary delay on making an offer. Delays can put you out of the running if there is a tight deadline for offers.

That said, be prepared to make an offer quickly. Communicate to your agent your offer in price and terms. Most likely, the agent can quickly send the offer to the listing agent by having you electronically sign it.

It’s likely that your first (or subsequent) offer won’t be accepted, especially in a multiple offer situation. Always have a plan B, C, and D, which may include looking for off-market homes for sale, and the possibility of renting.

By Dan Krell
Copyright © 2024

Protected by Copyscape Web Plagiarism Detector

August 23, 2023August 23, 2023

What’s your home buying strategy?

If you’re thinking about buying a home, you may be unaware of what awaits. Your expectation may not be exactly of what is really happening in today’s housing market. I understand that your beliefs and expectations are probably based on what you have read or heard. But the current housing statistics at face value don’t tell the story. It’s actually the cause of these stats that are telling and the force behind what is actually happening. Once you understand this, you can decide on your best home buying strategy.

First, let’s look at July’s housing statistics just published by the Maryland Association of Realtors (mdrealtor.org). Existing home sales decreased 22.6 percent from the same time last year. Homes that went under contract (Pending Home Sales) decreased about 8.3 percent from the same time last year. These home sale stats sound like what was being reported in the fall of 2007 (and you know what followed), especially since the forwarding looking stat Pending Home Sales decreased about 8.3 percent compared to the same time last year. At face value, you might conclude that such a huge reduction in home sales means that home buyers soured on the market (possibly because of the increase in mortgage rates you’re hearing about).

But home sale prices are increasing! The average home sale price increased about 3.2 percent compared to the same time last year, which is about $486,385.

So, what is happening?

New listings decreased about 34.5 percent compared to the same time last year! Active home sale inventory decreased about 35.7 percent compared to the same time last year! Basically, its supply and demand. When there is a shortage of a product when there is a demand, buyers bid up the price. The fierce home buyer competition is the reason why the median days on market for a home is only 7 days.

If you’re thinking that you can easily find your dream home and get a good deal, stop and do your due diligence. Know that you will be up against aggressive home buyers who are likely willing to bid up the price as well as waiving various contingencies to make their offer stand out.

What’s your home buying strategy strategy?

Before you go out and make an offer on home, take stock in what you bring to the table. Have you been pre-qualified for a mortgage? If you’re paying cash, is it liquid? Needing extended time to liquidate or bring funds from overseas is usually a non-starter for a home seller. Think about getting a pre-inspection so you know what you’re getting yourself into. Find a seasoned savvy real estate agent to help you navigate the market.

By Dan Krell
Copyright © 2023