Below are 3 Ways Home Buyers can Save Money on their Next Home Purchase
1. Understand that Everything is Negotiable
- To start with, the asking price is just that, an asking price. Some sellers price their homes to sell, but many price their home with emotion. What I mean by this is that they set the price at what they hope to get. So remember that the price is negotiable and your agent will be able to give you a good idea of true market value by sharing comps of other homes for sale and recent home sales in the area.
- The terms of the contract are certainly negotiable, too. There are many terms in a contract, including timing for inspections, financing and closing. Your buyers agent will be able to assist you in getting the terms that best fit your needs.
- Another thing that is fully negotiable is repairs that are based on inspections. Sellers do not have to agree to do all the repairs you request, so be prepared to negotiate, prior to asking for repairs. Again, your buyers agent is well suited to assist you with this process.
Photo courtesy of IDX
2. Get Proper Representation
Enlisting the help of an expert, as with most things in life, is a prudent thing to do.
Money Magazine says, “Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.”
This is just as true, if not more, with New Construction. Buyers need to understand that the person at an Open House (or Model Home) and the listing agent represent the best interests of the seller or builder. They do not represent your best interests.
This is a critical step in your home buying process.
3. Shop Mortgage Rates and Terms
We always suggest you talk with at least 3 lenders. After obtaining bids on mortgage rates, here is a step to save money, but also make the process of purchasing your home much smoother. Do not just pick the lowest rate (see #1). Instead, go back to the lender you are most comfortable with and ask them if they can beat, or at least match, the best rate. This will save you time and money.
Consider a 15-year fixed vs a 30-year fixed. If you can afford the payments, this may be a great strategy and it will certainly save you a lot of money over time. Discuss options with your lender.
By all means, get pre-approved.
Money Magazine says: “Getting pre-approved will save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.”
Bonus:
Homeowners Insurance: Again, shop and compare rates. Consider using an insurance company that gives discount rates if you combine your auto and home policies together.
Really look at deductibles and consider a higher deductible. Choosing a low deductible is “a characteristic mistake,” says Jack M. Guttentag, a professor at the Wharton School of the University of Pennsylvania who runs MortgageProfessor.com.
If you have any questions, or we can be of further assistance, just ask.
