Should I Offer Buyer Concessions or a Rate Buydown?
By Jeff and Lane Morrell · October 2026
The Morrell Group | eXp Realty
In this market they are a powerful tool: sellers in Colorado Springs are using concessions and buydowns to make payments work at 7.32% rates, and builders are offering them on new construction (Freddie Mac, Oct 22, 2026; see our October incentives blog).
What each one is
A concession is a seller credit toward the buyer's closing costs. A buydown lowers the mortgage rate, either for the first few years (a temporary buydown like 2-1) or for the life of the loan (a permanent buydown). Both effectively reduce the buyer's cash or monthly payment.
When concessions win
If the buyer is short on closing costs, a credit gets the deal to the table. FHA and VA loans have rules on how much sellers may contribute, so the loan type sets the ceiling.
In a market where buyers are rate-sensitive, a 2-3% credit can be the difference between an accepted offer and a pass.
When a buydown wins
If the buyer's obstacle is the monthly payment, a buydown attacks it directly: a 2-1 buydown cuts the rate for two years, and a permanent buydown helps for the life of the loan. Builders are using these heavily right now, and our posts on why builders are offering mortgage buydowns explain the strategy.
We model both against the price for every offer, because the same net to you can feel very different in the buyer's payment. If a concession or buydown is the difference between a sale and a stale listing, we will show you the numbers and recommend the tool that gets you to closing with the least cost. We've got you.
Here when you're ready, Jeff & Lane Morrell
- Freddie Mac Primary Mortgage Market Survey, Oct 22, 2026
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