Closing costs can take a considerable bite out of your budget regardless of whether this is your first home, or your buying your tenth. On average, they end up being around 10 percent of the total cost of your property, which isn’t pocket change in the first place.
Here are a few ways to lower those costs- or eliminate them.
Please don’t settle for the first offer that makes its way into your hands. Not when getting an appraiser, not when having someone check the property for you- especially not for loans. Double-check numbers. Going over your options should be one of your first steps to buy a house. There’s almost always a lower price out there than the first one you received. Do a little work, and you’ll find it.
Forgo the Realtor
With endless options when it comes to renting and buying homes on the internet- do you need a realtor? On average, realtors charge around six percent of the cost of a home, which is around $12,000 on a $200,000 home. Having a professional on hand may be helpful the first time you buy a home, but if you have a friend or a family member who’s more experienced, they may be able to help you through the hurdles.
Negotiate Them Away
This route is the ideal way to lower closing costs since it can remove them entirely. Negotiate with the seller, and often they’ll remove the sting of part of the closing costs from the price of the home. There are times when an especially motivated seller may even cover the closing costs in their entirety. Negotiation here rides on both how long the house has been on the market, and how desperate the seller is.
You can consider negotiating the cost with your bank, and possibly even with your realtor to lower their fees. View home buying as a bargaining trial; give yourself the best fighting chance to make your closing costs something you can afford.
Double Check Your Loan Estimate
When you’re offered an estimate for your loan, a lot of companies will send you a phonebook-thick booklet of why your loan is what it is. That can seem daunting, but don’t let them get away with a single fee or charge that you haven’t read over. You can lower how much you have to pay by removing the padded costs that you don’t need.
Choose Your Location Carefully
It’s no surprise that fees, taxes, and homeowner associations are entirely different from area to area. Although you may have first fallen in love with a home already, do your research to make sure you couldn’t be saving tens of thousands of dollars by moving just a couple miles away.
You give yourself the best chance at saving money if you’re willing to stick up for yourself and say what you want. Don’t be shy; when you buy a home, shyness can cost you hundreds of thousands of dollars. Save that money to furnish your beautiful new house.