Price Cut or Rate Buydown? What Works Better When Selling in Southwest Wisconsin

Price cuts are back, but they aren't the only move

More sellers are cutting prices right now. HousingWire data reported by Keeping Current Matters puts it at about 4 in 10 sellers, the highest in four years. When a house sits, a lower number feels like the obvious fix.

Sometimes it is. But buyers don't really shop by price. They shop by monthly payment. And there's another way to spend the same dollars that can hit that payment harder.

What a rate buydown is

A buydown is money paid at closing to lower the buyer's mortgage rate. When you pay it as the seller, you're prepaying some of the buyer's interest.

• Temporary buydown (like a 2-1): the rate is 2 points lower in year one, 1 point lower in year two, then goes to the full rate. Good for buyers who expect to refinance.
• Permanent buydown: paid with discount points. One point costs 1% of the loan and usually lowers the rate by about a quarter point. Good for buyers who plan to stay.

Same $5,000, three different results

Here's an illustration using a home price that fits a lot of Lancaster and Grant County sales. Say the buyer has a $190,000, 30-year fixed loan at 7%, and you're willing to give up $5,000 to get the deal done.

• $5,000 price cut: the payment drops about $33 a month.
• $5,000 in permanent points: the payment drops about $83 a month for the life of the loan.
• 2-1 temporary buydown (about $4,400): the payment drops about $244 a month in year one and $125 a month in year two.

Same money from you. The buydown can save the buyer roughly seven times more per month in year one than the price cut. These are rounded estimates, not a loan quote. The buyer's lender sets the real numbers.

What to know before you offer one

• Loan programs cap how much a seller can pay toward a buyer's costs.
• A buydown doesn't stop a buyer from asking for repairs or other concessions.
• Putting the buydown in your listing tells agents and buyers it's on the table.
• Run the numbers before an offer comes in so you aren't deciding under pressure.

My take for sellers here

In our small-town markets, a price cut also changes your comparable sale for the next appraisal on your street, and it resets the search ranges buyers see. A buydown keeps your price intact and gives the buyer a lower payment they can actually feel.

It isn't right for every house. If you're priced above what similar homes are selling for, no incentive fixes that. But if the price is close and the showings are slow, I'd look at a buydown before I'd cut. I'll run both scenarios for your house so you can decide with real numbers.

Source: [Keeping Current Matters](https://www.simplifyingthemarket.com/en/2026/11/06/selling-your-home-what-you-should-know-about-price-cuts-vs-rate-buydowns/). Payment figures are rounded illustrations.