A home is one of the most expensive things you’ll ever buy. Luckily, there are many ways to reduce the cost to make owning a home more affordable. In fact, in many parts of the world, it’s actually more affordable to own a home than to continue renting. Thanks to the rising costs of living, rental prices are going up just about everywhere.
It’s time to finally buy a home you can afford. When you buy a home, you want to get the best deal possible. The further you can stretch your cash, the greater return you can see on your investment when it comes time to sell your home. Here are 5 tips to lower the overall cost of buying a home so you can find a space that’s right for your budget.
1. All-Inclusive Pricing
Of course, the first way to save money is to look for a good deal on a home. These house and land packages that Perth, Australia has to offer are a great example just what you should be looking for when buying a home. Because you can purchase the land, home, and all amenities at once from the builder, there is a lot of room for big savings.
All-inclusive pricing can also refer to closing costs. If possible, see if the buyer is willing to work with you in reducing the cost of closing on your home. They might cover taxes, fees, and more to make the purchase price more affordable. Remember even the small things add up into big costs.
2. Down Payment Savings
While you don’t need to have 20% saved to put down on your home, you do need some savings. Owning a home cost with a lot of expenses, and you don’t want those expenses to creep up on you. Similarly, the larger your down payment, the less you’ll need to pay for Private Mortgage Insurance (PMI) and for your monthly mortgage payment.
Talk to your lender about a healthy downpayment you can afford. If you are able to afford a down payment of at least 20%, this will likely help you avoid PMI which can lower your monthly costs as well as closing costs.
3. DIY Homes
If you’ve ever watched any of the lifestyle programs on TV, you’ll know there’s an entire community out there dedicated to home improvement and home makeover projects. Finding a home in need of some TLC and DIY expertise might not be everyone’s cup of tea, but it can result in some big savings.
Homes that need a little bit of work are significantly cheaper than homes that come with all the fancy upgrades. Also, those upgrades might look fantastic in your recently-redone home, but they’re much more costly when you purchase them finished than when you do them yourself. Leaving that space in your home budget might make it possible to afford all your customizations and upgrades without the same high cost.
4. Winter Shopping
Did you know the time of year you go home shopping can impact the price of your home? That’s right, buying a home in the winter months can actually lead to lower prices. According to NerdWallet, you can save as much as $20,000 on your home just by making a purchase in the winter. This is because there’s more competition and demand for homes in the summertime when consumers are more likely to make a purchase.
Home prices are rarely set in stone. Most real estate markets today are competitive. That means there’s room for negotiating with the buyer to get a price you want. Most homes sell for less than the initial listing price, so don’t be afraid to offer something lower.
When should you negotiate? Well, always, but within reason. If there are improvements needed on the home or if you’re the only offer the home has seen in weeks or months, there’s a lot of room to lower the price. Otherwise, talk to your real estate agent about the best pricing strategy.
Owning a home doesn’t have to be a fantasy. In this market, it’s possible to affordably buy a home that will last a lifetime. Just follow these tips above to make sure you aren’t overspending.