10/24/2025
I often see realtors using the terms “price reduction” and “closing credit” interchangeably but, when a buyer is obtaining a mortgage, they can have very different impacts - let’s clear up the confusion.
After inspection issues arise, it’s important to know which option actually helps your client most.
*A price reduction lowers the loan amount and monthly payment — but gives the buyer no cash in hand for repairs.
*A closing cost credit, conversely, keeps the price the same but helps free up funds for post-closing repairs. It allows your client to bring less money to closing than they otherwise would have - leaving more cash in their pocket to make the necessary repairs post-closing.
Both are useful tools — you just need to know when to use which.
Have questions before amending your P&S? Reach out - I’m always happy to talk through the best approach for your deal.
