Strategies to help save you thousands when buying a home
What’s your biggest expense? If you’re like most people, it’s putting a roof over your head. And it’s getting more expensive. In fact, the cost of housing is rising faster than incomes for the middle class. Renters may have the worst of it as studies show that rent prices have been rising for 23 consecutive quarters.
By buying a home, you have more control over rising housing costs. You won’t have to worry about a landlord raising the rent, and a fixed-rate mortgage loan guarantees the same principle-and-interest loan payment for the next 30 years.
Buying a home is one of the most expensive purchases you’ll ever make, but there are some very simple strategies that can help you save thousands of dollars while doing it.
These strategies could help you to save thousands of dollars and create a smoother home buying experience:
Use an Experienced Local Real Estate Agent
A good real estate agent is like a skeleton key that can unlock the door to the multiple resources you need to buy a house. Using a Real Estate Agent will save you a lot of time, money and heartbreak. They are experience in the home buying process and real estate contract expertise is vital for getting the best deal on a home and ensuring the process goes smoothly. While some first-time buyers may try to save some money by not using an agent, this will hurt more than help. A real estate agent will be able to help you save money, protect you and negotiate various things in the contract you may have never even heard of.
Find out how familiar the agent is with the areas you want to look at, you will want an experienced local Real Estate Agent. If they have little expertise and no network in the neighborhood, then you won’t get the agent advantage of being the first to see a house (sometimes even before it’s listed) or getting expert advice on price. Plus, neighborhood knowledge saves the buyer time because an agent will likely know exactly where to look and what houses to show based on your needs.
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Get a Home Inspection
Would you buy a car without checking under the hood? Of course, you wouldn’t. Hire a qualified home inspector, it will cost approximately $200 up front but could end up saving you thousands in the long run. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy a particular home. A home inspection is really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune. Conducting a pre-home inspection can also really strengthen your offer, as you will no longer need to include a home inspection as a condition.
Shop Around for The Right Mortgage That Best Suits Your Needs
Mortgage brokers are a great resource to buyers because their job is to shop multiple banks to find the right mortgage plan for you. Remember to look for other options as well, rather than just selecting the first one that is presented to you. Interest rates will vary from lender to lender so it’s recommended you get loan quotes from at least 3-4 different mortgage lending companies. It is also important to compare the terms and conditions of the mortgage and consult multiple sources before you lock into an agreement – there could be a penalty if the mortgage is broken before your term is up.
Have Your Realtor Prepare a CMA (Comparative Market Analysis)
Your agent will prepare for you a comparative market analysis (CMA) that is an in-depth version of any research you may have done on your own. The CMA is used to help evaluate how your home will fare against the competition. It takes a look at both homes that are currently listed and those recently sold. The purpose is to find the highest price that will still make the home competitive on the open market. This helps sellers set a listing price for their property. CMAs examine the prices at which similar properties in the same area have recently sold. A professional CMA will ensure you do not overpay for your property. When you are equipped with the recent sale prices of homes similar to the one you are planning on purchasing, you are empowered to make a confident and fair offer.
There is often room to negotiate in an offer, and splitting the difference on a needed repair or adjustment can be an effective way to save the buyer money. Chances are your home inspection report will turn up some problems with the home — but, keep in mind, not all repairs are created equal. There are major issues that will likely need to be dealt with before a lender will honor a home loan, such as structural problems and building code violations. In these cases, the homeowner is responsible for repairs before the sale can go through.
In a seller’s market, experts advise buyers to overlook cosmetic issues, such as loose fixtures, water stains (as long as it’s not the symptom of a larger problem), failed window seals and cracked tiles. Meeting in the middle brings a quick resolution to most challenges.
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