Almost every buyer I talk to in the Valley right now is being offered something. A credit, a price cut, a contribution toward closing costs. Very few of them know that the structure matters more than the size. Freddie Mac has the 30 year fixed back above 7% for the first time since 2025, and Redfin reported concessions in 44.7% of U.S. sales in August, the highest August share since at least 2020. The money is on the table. Most buyers spend it wrong.

The math, run side by side

A price reduction lowers your loan amount. A buydown lowers your interest rate. At 7%, the rate is doing far more work than the principal, and it is not close.

Here is the same $10,000 spent three ways on a $500,000 Scottsdale home with 10% down. Your starting point is a $450,000 loan at 7.00%, which runs about $2,994 a month in principal and interest.

A $10,000 price cut removes $10,000 of debt. A $10,000 buydown changes the cost of all $450,000 of it.

Over five years that gap compounds into roughly $7,600 more in your pocket from the buydown. Over the full thirty years, assuming you never refinance, it clears $45,000. That is the entire argument, and it takes about ninety seconds to explain to a listing agent who is trying to protect a headline sale price. Most of them say yes, because a buydown does not touch the comp.

When the price cut is actually better

Take the price reduction when you expect to refinance or sell within about three years, or when the appraisal is the thing standing between you and the closing table.

Points are prepaid interest. You are buying a lower rate for the life of the loan, so you need to hold that loan long enough to earn the $10,000 back. On the numbers above, break even lands right around 54 months. Sell or refinance before then and the price cut would have been smarter. The Consumer Financial Protection Bureau walks through the same trade off, and it is worth ten minutes before you commit cash to points.

Three other situations push me toward the price cut:

• The appraisal came in low. If the home does not appraise at contract price, no rate buydown fixes the loan. Either the price comes down or you bring the gap in cash. We laid out the options in our guide to an Arizona appraisal coming in low.
• Your cash to close is tight. A lower purchase price also shrinks your down payment. At 10% down, a $10,000 price cut puts $1,000 back in your pocket at closing. A buydown puts back nothing.
• You are bumping the conforming limit. Arizona's 2026 conforming limit is $832,750. If a smaller loan keeps you in conventional pricing instead of jumbo, the price cut is worth more than any buydown.

The option nobody asks for

A 2 to 1 buydown is the structure most buyers do not know to request, and it is the one builders across Metro Phoenix are pushing hardest. The seller funds an escrow that cuts your rate by two points in year one and one point in year two before it settles at the note rate for the remaining twenty eight years.

On that same $450,000 loan, a 2 to 1 drops year one to roughly $2,416. That is a $578 a month cushion during the exact stretch when you are also buying appliances, repairing irrigation, and finding out what a Scottsdale August does to an electric bill.

The catch is that it ends, and it ends whether or not rates cooperated. If you expect to hold this rate for a decade, the permanent buydown is the better trade. Our breakdown of how buydowns and discount points work in Arizona runs the full comparison, and our loan programs page covers which structures each product allows.

What your loan type lets a seller pay

Every loan caps what a seller can contribute, and the cap is the reason to call your broker before you write the offer instead of after.

Two rules sit on top of that table. Concessions can never exceed your actual closing costs, prepaids, and points combined, so you cannot pocket the difference as cash. And investment property purchases cap at 2% no matter how much you put down. HUD publishes the FHA rules directly if you want the primary source.

Run your own numbers

Why Arizona sellers are saying yes

Because they have to. Phoenix inventory is the highest it has been in more than a decade, homes are averaging well past 100 days on market, and Redfin counted roughly 58% more sellers than buyers nationally in August. The National Association of Home Builders reported that more than a third of builders cut prices outright in September, with the average reduction around 6%.

That is the leverage. The question in the Valley is no longer whether you can get a concession. It is what you ask the seller to do with it, and that is a conversation your lender should be in before your offer goes out. Start by seeing what is actually sitting at Arizona Luxury Property Search, cross check days on market against Homes.com's Phoenix Housing Market Reports, and bring the address to our team at Pillar Mortgage Group before you write. Our process page shows what the first 48 hours look like.

One more piece of leverage most buyers never use: a listing that has been sitting 90 days has usually already had a price reduction the seller resented. Asking for the same dollars as a buydown instead of another price cut gives them a way to say yes without another public markdown. Agents know this. Buyers rarely do.

For what those concession dollars are competing against, our guide to closing costs when buying a house in Arizona breaks down the full line item list.

Honest caveat: a buydown is not free money and it is not always right. If you are stretching to qualify, if your cash reserves are thin after closing, or if there is any real chance you move inside three years, the price cut or a temporary buydown is the better call. A broker who tells you to always buy points is not doing math, they are selling a bigger loan. We would rather run the break even with you and have you take the smaller number.

Frequently asked questions