To save even more money, consider purchasing a house near a hot neighborhood that also needs a little bit of work. You can then update and renovate a little bit at a time. This saves you money up front and allows you to control your costs.<\/p>\n
Related:\u00a0<\/strong>The Key to Saving Money in Real Estate: Property Maintenance<\/a><\/em><\/p>\n Real estate agents do a lot to help their clients find the perfect house, negotiate a fair price, and walk through the legal aspects of closing. In return, they generally receive a 3 percent commission ($9,000 on a $300,000 house). There are, however, ways to save in this area.<\/p>\n One unique option is to use a service like SimpleShowing<\/a>, which actually refunds the buyer 1.5 percent of the purchase price at closing. Depending on how much house you\u2019re buying, this can result in huge savings.<\/p>\n If you aren\u2019t careful, closing costs are where you\u2019ll get hit. Zillow estimates<\/a> that closing costs will run the average buyer somewhere between 2 and 5 percent of the home purchase price. On a $200,000 home, that\u2019s $4,000 to $10,000.<\/p>\n Closing costs include things like lender fees, appraisals, title fees, attorney fees, escrow fees, interest, termite inspections, radon testing, etc. What most buyers don\u2019t know is that they can negotiate many of these costs. In doing so, you may be able to save a couple thousand dollars right away.<\/p>\n If you borrow more than 80 percent on a home, you\u2019ll almost always be required to pay private mortgage insurance (PMI). This will typically cost you 0.5 \u2013\u00a01 percent of the total loan amount (per year). If you can avoid paying it, you should.<\/p>\n \u201cA down payment of 20 percent is the most obvious way to avoid paying for PMI,\u201d personal finance expert Steve Gillman writes<\/a>. \u201cIf this is tough with the homes you\u2019re considering,\u00a0Realtor.com\u00a0suggests simply shopping for lower-priced homes for which you\u00a0can make a 20 percent down payment.\u00a0Multiply the down payment you have by five to arrive at the highest price you can pay while avoiding PMI.\u201d<\/p>\n Related:<\/strong>\u00a03 Smart Ways to Make an Extra $1,000 a Month Through Real Estate Investing<\/a><\/em><\/p>\n Just as you can with any other type of insurance \u2013 such as life or auto \u2013 you can shop around and compare prices for home insurance. While every home-insurance product is different, you may be surprised to learn just how much discrepancy there is in price. Just make sure you\u2019re getting enough to protect your investment.<\/p>\n If you’re considering buying a house, it’s important to understand the timeline for buying a house<\/a>. Rushing into a home purchase can lead to costly mistakes and regrets. It’s not just about finding the right property, but also about the time and effort required to secure financing, negotiate the terms of the sale, and close the deal. Take your time, do your research, and make sure you’re fully prepared before embarking on this journey.<\/p>\n It\u2019s one thing to own a nice house. It\u2019s totally different to own a home and be financially comfortable in it. Spend what you can and do your best to avoid being house poor. You\u2019ll experience much greater satisfaction and peace of mind.<\/p>\n2. Avoid Standard Commission<\/h3>\n
3. Negotiate Closing Costs<\/h3>\n
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<\/p>\n4. Eliminate PMI<\/h3>\n
5. Shop Around for Home Insurance<\/h3>\n
Don\u2019t Be House Poor<\/h2>\n
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