How Offering Loan Assumption Can Get You a Higher Sale Price

Let's talk about something most sellers don't know: your low-rate mortgage can literally increase your home's sale price. Not just attract more buyers, but get you more money.

Here's the logic, and it's simple: if a buyer saves $1,000/month by assuming your loan versus getting a new one, they can afford to pay more for your home. And they will.

The Price Premium Math

A buyer looking at two comparable homes:

Home A (yours): $460,000 with a 2.75% assumable rate. Monthly P&I on the assumed loan: ~$1,556.

Home B (neighbor): $445,000, no assumable loan. Monthly P&I at 7%: ~$2,959.

Even though your home is $15,000 more expensive, the buyer's monthly payment is $1,403 LESS. Over 25 years, they save over $420,000 in total payments.

A rational buyer will choose your home every time. And many will pay even more because the rate advantage is so significant.

How Much Premium Can You Expect?

Based on what I'm seeing in the Colorado market, homes with well-marketed assumable loans are commanding premiums of $10,000-$30,000 over comparable listings without assumptions.

The exact premium depends on:

• **The rate gap.** A 2.5% rate vs 7% market rate creates more value than a 4% rate vs 7%. Bigger gap = bigger premium.
• **The loan balance.** A larger remaining balance means more money at the low rate, which means more savings for the buyer.
• **Local market conditions.** In competitive markets, the premium can be higher because more buyers are competing.
• **How well it's marketed.** If you bury the assumable rate in the fine print, you won't see the full premium.

Why Buyers Pay More

From the buyer's perspective, paying $15K-$25K more on the purchase price is a no-brainer when they're saving $800-$1,200 per month.

Quick math: $20K higher purchase price costs the buyer about $133/month on the assumed loan (or about $177/month if financed as part of the equity gap). But they're saving $1,000+/month on the rate difference. Net benefit: still $800+/month in savings.

Buyers understand this. Good buyers' agents understand this. The premium sells itself when you present the numbers.

Structuring the Deal

There are a few ways to capture the premium:

1. Price slightly above comps. List $10K-$20K above comparable homes and justify it with the assumable rate savings. Include a comparison sheet showing the buyer's payment advantage.

2. Negotiate up from offers. If you receive multiple offers (which is more likely with assumption marketing), use the competition to push the price higher.

3. Offer the assumption as a "bonus." Price at market value but market the assumption aggressively. Buyers who see the savings will offer over asking.

4. Appraisal considerations. If the buyer is financing the equity gap with a second mortgage, the second mortgage lender may require an appraisal. Make sure your pricing is supportable by comps. The assumption rate doesn't directly impact the appraisal value, but higher buyer demand does push market values up.

Real Scenarios

I had a client list a 4-bed in Colorado Springs at $475K. Comparable homes were selling at $455K-$465K. The listing prominently featured the 2.625% assumable rate. Received three offers in the first week. Closed at $480K.

The assumption didn't just attract buyers. It created competition. Competition pushed the price above what a non-assumable comparable would have achieved.

Another example: a townhouse in Aurora listed at $355K (comps at $340K-$350K) with a 2.9% rate. Sold at asking within 10 days. The buyer's agent told me directly: "My client chose this over two cheaper options because the payment was so much lower."

What If the Buyer Doesn't Assume?

Even if the winning buyer ultimately doesn't assume the loan (maybe they prefer a new mortgage for whatever reason), marketing the assumption still helped you. It brought more traffic, more interest, and more competitive pressure. The assumption is a marketing tool even when the buyer doesn't use it.

Your Agent Matters

I want to be direct about this: most agents don't know how to market assumable loans. They don't put it in the listing, don't create comparison sheets, and can't explain the process to buyer's agents.

Work with an agent who understands assumptions. Someone who knows how to position your rate as a selling point, handle buyer questions, and manage the assumption process if a buyer wants to go that route.

The premium is real, but only if it's captured through proper marketing and negotiation. Don't leave it to an agent who's never done one.