If you are in the market to purchase a new home, you may reasonably have your eye focused on your budget and finances. Buying real estate can be one of the most significant and costly investments that you make in your lifetime, and you can spend a sizable amount of money as you walk through the buying process. The good news is that there are a number of steps that you can take to reduce your costs and to save money as you purchase your next home.
Work with an Experienced Real Estate Agent
The most significant cost associated with buying a new home is the property itself. While you certainly do not want to sacrifice on factors like features, square footage or location when making your selection, the fact is that you also do not want to pay more than necessary for the home. When you work with an experienced real estate agent, your agent can help you to determine if the asking price is reasonable. He or she can also negotiate a lower price with the seller on your behalf.
Negotiate Real Estate Agent Fees
It is traditional practice for a seller to pay all real estate agent fees associated with the sale, but this is not always the case. Almost all of the fees that a real estate agent may charge you can be negotiated, and you may consider requesting quotes for fees from several experienced and reputable agents before you decide which agent to work with.
Ask Your Seller to Pay for Some Transaction Expenses
There are instances when a seller may be willing to pay several hundred or even thousand dollars toward title fees, appraisal fees and other fees, and this may appear as a credit to you at closing. Even when the seller is not willing to pay for these expenses, keep in mind that a repair allowance, a painting allowance or other credits also will appear in the same fashion on a closing statement. These credits can all be used to offset the amount of closing costs that you are required to pay for at the closing table.
Shop Around for Third Party Reports
Some third party report vendors will require you to pay for their services up-front, and others may be agreeable to collecting their fees at closing. These may include termite inspectors, property inspectors, foundation specialists, appraisers and others. While the fees charged by various service providers may be fairly close and competitive, keep in mind that all of the fees will add up. By making a few extra phone calls to find the best rate, you can keep costs lower.
Shop for Lower Property Insurance
In most cases, you will be required to pay for at least a portion of your property insurance premium at the closing table, and you may also be required to establish an escrow account for the insurance. Shopping around for the best rate on homeowners insurance can help you to reduce these costs.
Consider All Financing Costs
Your focus may understandably be on finding a mortgage company with competitive loan terms, but the fees charged by financiers can vary significantly. Inquire about lenders fees, escrow requirements and additional expenses up-front. Request an estimate of closing costs, and do not be afraid to request that some fees be lowered if you feel they are too high.
The fact is that most home buyers are largely focused on negotiating the lowest price on the purchase of their home, but there are many costs that you will be responsible for at closing. Keep each of these points in mind in order to save as much money as possible when buying your next property.