Many families dream of buying a house, but home buying is an expensive venture. There's a reason why a house is called an investment, after all. Fortunately, there are a few ways you can save during the home buying process so you don't need to use all of your family's savings to make that investment.
Here are a few ways you can save money during the home buying process and even after you've closed on a new family home.
Buy less house than you can affordIt's tempting when you're looking for a new house to buy more house than you need. This is because the size of your home is commonly attributed to success. But buying a large house is not only more expensive, but it's also more expensive after you've bought it. It takes energy to cool and heat all that square footage.
Be smart about your real estate agentYour real estate agent isn't just your representative when buying your home. They're also your source of information about local neighborhoods and help you view options to choose from. Up to 78% of recent home buyers found their real estate agent to be a useful information source. Choose a real estate agent who has a lot of experience in the area in which you're looking to put down roots. They'll help you save a lot of time, money, and heartbreak.
Don't skip out on your inspectionMany homebuyers looking to save money during the home buying process will choose to opt-out of an inspection. But skipping an inspection to save a few hundred dollars could end up hurting you more in the end. The good news is that you may be within your rights to sue someone who knowingly sells you a house with serious issues.
According to Lance Luke, owner of Construction Management Inspection, LLC, most states have a home seller disclosure law requiring home sellers to disclose any defects in the home they're aware of. If you're injured because of one of these defects, you may be able to sue for personal injury. Just be aware that many states, including Texas, have a two-year statute of limitations to file a personal injury lawsuit.
Consult with multiple lendersIt might seem easier to get a mortgage quote from a single lender that you already know about from friends or family. But interest rates vary from lender to lender. It's in your family's best interest to seek out loan quotes from three to four different mortgage companies, not just one.
Make sure to analyze the loan estimate that each lender provides you. Every lender will have different fees for applications, mortgage processing, and more, and those fees will show up in the estimate. If other lenders offer you lower quotes, you can use these quotes to negotiate lower fees and rates with a mortgage lender you like.
Choose a house that needs some elbow greaseIt can be tempting to avoid houses that need some work, especially when you have a young family. But with the current housing shortage, many families across the U.S. are looking for move-in ready homes just like you are.
You don't need to invest in a house that needs a serious renovation to save money. Consider choosing a house that other homeowners may avoid such as a house with a pastel-colored bathroom, wall-to-wall carpeting, or wall coatings. These features are merely considered unattractive and don't actually impact the home's integrity. In fact, coatings actually have two primary functions: protection and decoration.
These are smaller projects you can manage on a smaller renovation budget compared to a whole-house remodel. What's more, because the competition for the house is lower, you may be able to buy the house at a lower price.
It's no secret that buying a house is expensive. But by being strategic throughout the homebuying process, you can reduce how much you need to spend to get the house your family will love.