When a home has been sitting on the market longer than expected, lowering the price is usually one of the first ideas that comes up. And sometimes, that’s exactly the right move. A lower price can put the home in front of a new group of buyers or bring it more in line with what similar homes are selling for.

But price isn’t the only thing buyers are looking at.

For some buyers, the bigger concern is how much cash they’ll need at closing. For others, it’s the monthly mortgage payment. So, if a seller is already considering giving up some of their proceeds to get the home sold, there’s another question worth asking: Could those dollars help the buyer more somewhere else?

Depending on the loan and the transaction, seller concessions can sometimes be used toward closing costs or even to help lower the buyer’s mortgage rate.

A Lower Price May Not Change the Payment as Much as You’d Expect

Taking $10,000 off the price of a home sounds like a big difference. But when that amount is spread over a 30-year mortgage, the change in the buyer’s monthly principal and interest payment may be smaller than expected.

That doesn’t mean a price reduction is a bad idea. If the home is priced higher than comparable properties or buyers simply aren’t responding to the current price, an adjustment may be needed.

It does mean that price and affordability aren’t always the same problem.

A buyer could be perfectly comfortable with the price of the home but concerned about how much money they need upfront. Another buyer may have plenty saved for closing but be watching the monthly payment closely. Those are different problems, and they may have different solutions.

Seller Concessions Can Help With Closing Costs

The down payment isn’t the only money a buyer may need to bring to closing. There are also closing costs and prepaid expenses to account for.

Depending on the loan program and transaction, the seller may be able to contribute toward some of those eligible costs. For a buyer who has the income to comfortably handle the mortgage but would rather not drain their savings to get through closing, that can make a real difference.

It could also leave the buyer with more money in the bank after they get the keys—which can be helpful when moving expenses, furniture, repairs, and all the other costs of a new home start showing up.

What About a Temporary Rate Buydown?

Another option in some transactions is a temporary mortgage rate buydown.

Instead of lowering the purchase price, seller funds can be used to temporarily reduce the buyer’s mortgage payments during the first few years of the loan. You may have heard this called a 2-1 buydown or 3-2-1 buydown.

With a 2-1 buydown, for example, the buyer receives a larger payment subsidy during the first year and a smaller one during the second year. After that, they make the full payment based on the actual note rate of the mortgage.

This can give a buyer some extra room in the budget during those first couple of years of homeownership. However, it’s important to remember that the lower payment is temporary, and buyers generally still need to qualify based on the requirements of the underlying loan.

Or Could Those Dollars Lower the Rate for Longer?

Seller concessions may also be used toward discount points to get a lower mortgage interest rate when the loan program allows it.

This works differently from a temporary buydown. Rather than subsidizing the payment for the first year or two, discount points are paid upfront in exchange for a lower interest rate on the mortgage.

Whether that’s worth doing depends on the numbers. How much does it cost to get the lower rate? How much does that lower the monthly payment? How long would it take for those monthly savings to make up for the upfront cost?

That’s why the lowest rate isn’t automatically the best deal. The cost of getting that rate matters too.

The Best Use of $10,000 Depends on the Buyer

Say a seller is willing to give up $10,000 to help get a deal done.

One buyer might get the most value from putting that money toward closing costs because cash is their biggest concern. Another may care much more about lowering the monthly payment. A third buyer may simply prefer a lower purchase price.

There isn’t one strategy that works best for every buyer or every home. Seller concessions also have limits, and those limits can vary based on the loan program, down payment, occupancy, and other details of the transaction.

That’s why it helps to look at the actual numbers instead of assuming a $10,000 price reduction is automatically the best use of $10,000.

Sometimes the Price Really Does Need to Come Down

None of this means sellers should avoid lowering their price. If the market is telling you the home is overpriced, an incentive isn’t going to magically change that.

But if a seller is already willing to negotiate, it’s worth looking at more than one option.

The real estate agent can help determine whether the price is holding the listing back, while the lender can show what different seller concessions could actually mean for a buyer’s payment and cash needed at closing.

Before automatically lowering the price, compare the numbers. You may find there’s another way to make the deal more attractive to the buyer.