One in Five Sellers Cut: How to Write the Offer Now

One in five listings took a price cut and pending sales hit a five-month low. Here is how to construct an offer that captures the concession.

Re:InvestorHub Team · · Deal Analysis

Two things happened in the first week of August that do not usually happen together. Redfin reported pending home sales fell 3.7 percent week over week to 311,150, the steepest weekly drop since 2022 and a five-month low. Days earlier, the Realtor.com July housing report showed the share of listings with a price cut climbing from 18.8 to 20.0 percent, with the median list price at $428,950, down 2.4 percent year over year for a ninth straight annual decline.

Sellers cutting and buyers disappearing at the same moment is the specific condition that makes terms negotiable. Not just price. Terms. This is the window where rate buydowns, closing credits, and extended due diligence stop being awkward asks and start being things sellers say yes to. Here is how to construct the offer.

Why Does a Buyer Pullback Change What You Can Ask For?

A seller with three offers negotiates on price alone, because price is the only axis where competing buyers can be ranked. A seller with no offers and a listing going stale negotiates on everything, because the goal changes from maximizing proceeds to closing at all.

That shift is worth more to an investor than a price cut of the same nominal size, and most buyers never ask for it. A seller who will not drop the price another $10,000 will frequently pay $10,000 toward your rate buydown, because the first feels like losing and the second feels like helping the deal close. The proceeds are identical. The framing is not.

Is a Price Reduction or a Seller-Paid Buydown Worth More?

This is the calculation almost nobody runs, and it usually favors the buydown. Work a concrete example on a $400,000 purchase with 25 percent down, so a $300,000 loan, at the current 6.69 percent 30-year fixed.

Take the price cut first. A $12,000 reduction brings the purchase to $388,000 and the loan to $291,000. At 6.69 percent, the principal and interest payment falls by roughly $58 a month. Over a five-year hold that is about $3,480 in cumulative cash flow, plus $9,000 less cash out of pocket at closing from the smaller down payment.

Now take the same $12,000 as a seller-paid permanent buydown. Applied to a $300,000 loan, roughly $12,000 in points buys down the rate meaningfully, and every 25 basis point reduction is worth about $50 a month on that balance. A buydown of that size can cut the payment by $150 or more per month, which is roughly $9,000 over five years, and it improves your Debt Service Coverage Ratio (DSCR) on day one, which is what your lender is actually testing.

The buydown wins on monthly cash flow and on loan qualification. The price cut wins on cash needed at closing and on your basis for a future sale. Which one you want depends on whether your binding constraint is cash or cash flow, and that is a question you answer per deal, not by rule.

What Should Go in the Offer?

Six items, ordered by how often sellers accept them in a soft market:

  1. A seller-paid rate buydown, stated in dollars rather than in points. Sellers understand a $12,000 credit. Many do not understand what buying down 75 basis points costs, and confusion kills otherwise acceptable terms.
  2. Closing cost credits, which are the easiest concession for a seller to approve because they read as transaction friction rather than as a price concession.
  3. An extended due diligence window. Ask for 21 days instead of 10. In a market with no competing offers this costs the seller nothing they are currently using, and it buys you real inspection time on a property you have not been able to fully assess.
  4. A repair credit in place of repairs. Sellers under financial pressure often cannot fund the work, and a credit lets you control the scope and the contractor rather than inheriting the cheapest possible fix.
  5. A leaseback or delayed possession where the seller needs time. This costs you almost nothing on a property you plan to renovate anyway, and it is worth real money to a seller with nowhere to go.
  6. A price reduction, last. Ask for it after the terms are agreed, not before, because leading with price invites the seller to defend the number and anchors the entire conversation there.

How Do You Know the Seller Is Actually Motivated?

Days on market is the cheapest signal available and most investors underuse it. A listing at 60-plus days in a market where the median is 30 has already told you the seller's price is wrong and that they know it. The price cut itself is a second signal, and a second cut is a third. Stack them.

What you should not do is assume the national numbers describe your street. A 20 percent national price-cut share means some submarkets are at 35 percent and others are at 8 percent. Pull your own market's cut share and days on market before you decide how aggressive the offer should be, because writing a soft-market offer into a tight submarket just gets you rejected without a counter.

How Long Does This Window Stay Open?

Not long, and that is the point. Weekly pending sales data is volatile by nature, and a single steep drop can reverse just as fast. The price-cut share is the more durable of the two signals, since it reflects listings already sitting rather than one week of buyer behavior.

Treat the current setup as a condition to act on rather than a trend to wait out. The sellers who cut in July are negotiating in August. The ones who hold out will either cut in September or pull the listing. Either way, the offer you write in the next few weeks is meeting a seller at the point of maximum flexibility, and that is worth more than any forecast about where prices go next.

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