Let’s face it, buying a house is an expensive proposition. There are bidding wars on houses taking place all around the country. It is an extreme seller’s market characterized by uncharacteristically low housing inventory.
Homebuyers are often in competition with many other purchasers for their dream home. With homes being one of the most expensive purchases someone will make in their lifetime, there must be some potential ways to save money. Let’s look at some of the best ways to save money when buying a home.
Hire a Buyer’s Agent
One of the essential first things to do when buying a home is to seek out and find one of the best buyer’s agents in your area. A buyer’s agent doesn’t just show you homes. That is their least important task.
A buyer’s agent is someone you can count on to look out for your best interests throughout the transaction. They will be beholden to you and only you. The best buyer’s agents will always put the interests of their clients before their purses or wallet. An outstanding agent will provide research on the home you’re interested in purchasing, along with the neighborhood and surroundings.
Their job is to uncover any potential problems impacting the property’s value. Once you have identified a home you would like to offer on, they will conduct a comparative market analysis (CMA) to determine the current market value. One of the most vital roles of a buyer’s agent is to ensure you don’t overpay for a home.
Without a buyer’s agent in your corner, you could pay tens of thousands of dollars more than you should. The best buyer’s agents are expert negotiators. They will provide advice to ensure you pay what the market dictates.
Ask for a Commission Rebate
Are you also going to be selling a home? If you are doing two real estate transactions with one agent, asking for a commission discount is always a sound decision. Any intelligent real estate agent should understand that having two transactions making slightly less money is better than having no transactions.
If you find an agent who doesn’t agree with this, they are not worth your time. Having been a real estate agent myself for thirty-five years, I will gladly say yes to anyone who asks. It’s good business. Every transaction you are involved in is the opportunity to have more. As an agent, you get to advertise your success in many ways from the newspaper, postcards, and social media.
When you have no sales, there isn’t much to advertise.
Shop for a Mortgage Broker
Another thing many home buyers do not realize is that shopping for a mortgage can save some serious money. The longer you are in your home, the more you pay down a mortgage. What you end up paying for a home isn’t your purchase price but what you pay in interest over the life of the loan.
Most buyers will work with a lender they have been referred to or someone they have already been dealing with on something else. When buying a home, you should seek out a mortgage broker! A mortgage broker works with multiple lenders and can help you understand things like mortgagee clauses and private mortgage insurance.
They will find the best loan deal based on what you’re looking for in a mortgage. Maybe you want a thirty-year fixed-rate mortgage with no points. Instead of walking into the local bank or going with a recommendation, a mortgage broker can place your loan with the lender who has the best terms.
You could end up with an interest rate or substantially better terms than another lender. Shopping for the best loan is just plain smart.
Speak to Multiple Moving Companies
One of the most expensive aspects of buying a home is hiring a moving company. If you don’t mind the thought of a DIY move, you could save thousands of dollars. If you’re not willing to do so, the next best thing is to interview multiple moving companies.
Many movers allow you to get an online estimate for your move. While that may seem cool, it is not what you want. Online moving estimates are not accurate. You will want to meet any potential movers face to face. Have them take a careful look at everything you will be moving. Getting the estimate in writing from three or four movers is crucial.
You will be surprised at just how different the estimates can be. Make sure you scrutinize them completely to know you’re getting apples to apples.
Speak to Multiple Home Insurance Providers
Another place where you can save money buying a home is through your home insurance provider. It makes sense to speak to at least a few like other vendors. One of the better ways to save money is to bundle your insurance with the same company.
For example, if you have your car insurance with a particular firm, ask them to quote, adding your house into the mix. What will the total bill be for the two? You should also find a couple of other home insurance companies and ask them what it would cost to insure the house as well as provide insurance for your car.
Consider Buying a Fixer-Upper If You’re Handy
If you are handy, consider buying a home that needs quite a bit of work. Turnkey homes sell for the most money. Properties that need a lot of improvements are often sold at a discount. Building sweat equity is an excellent way of saving money if you’re handy.
By the time you’ve made all the improvements, the property will be worth substantially more. Along the way, you will have saved much of the profit the contractors would have charged. When there are things you didn’t update, keep a log so you know when the useful life is near the end. It is one of the more important things to know when buying a house.
Prioritize Your Budget
When buying a home, purchasing what you can afford is vital. Stretching your comfort limits increases the odds that something can go wrong. You should always buy within your means. Having a cushion in the event financial catastrophe strikes is essential.
Hopefully, you can take some of the money-saving advice to good use on your home purchase.