Real estate is likely to be the biggest purchase you’ll ever make in your life. As property prices continue to go up, buying a home is becoming an even more expensive endeavor. However, there are creative ways in which you can save money when buying a home. For those that may be looking to get on the property ladder for the first time, some of these options could be worth considering.
Save Money When Buying a Home (without sacrificing your wish list)
Ready to shop? Use these tips and think outside the box.
1 – Consider the location
The location has a big impact on the price of the property. You only have to compare a state like Hawaii (in which the average home costs over $667k) with a state like Mississippi (in which the average home costs less than $132k). Even after hiring a long-distance moving company and booking plane tickets, you could save huge amounts of money by relocating. If nothing is keeping you in your home state, consider whether it’s worth making a move.
Of course, you don’t have to move to another state to access lower prices. If you live in a city, simply moving to a different area or even a different street could impact the price. It’s often a case of what you can sacrifice that might otherwise be a pull factor. Does it matter that there are no schools near? Does it matter that you’re near a busy road? Or does it matter that the view isn’t particularly appealing?
If the answer to all of these is no, you could save yourself a lot of money.
2 – Consider a fixer-upper when buying a new home
Fixer-uppers are properties that need a lot of restoration work. Because of their condition, they tend to sell very cheaply. Such properties could be a way of getting yourself on the ladder.
Of course, you need to be able to afford any necessary repairs. While you may be able to live with peeling wallpaper, damaged carpets, or a loose skirting board, you may not be able to live with a hole in the roof or no hot water. Such fixes may be legally required before you can move in, so ensure your budget extends to these repairs.
It’s possible that you could make up costs in restoration work. However, you may not have to make minor repairs immediately, allowing you to spread out the cost. Another advantage to a fixer-upper is that you will likely add a lot of value, potentially allowing you to buy a much better home after. Just make sure in advance that the restoration work isn’t likely to be too serious – a home inspection may be able to tell you exactly how much you’ll have to spend on fixes.
New builds can often be cheaper than older properties. This is because many are designed and built economically. Unlike older homes, new builds tend to also be more energy-efficient, plus you won’t have to make nearly as many repairs.
Some states have incentive programs in place that can further reduce the price of a new build, providing that you’re a first-time buyer. This could include having money put towards your down payment. Such incentives are worth taking advantage of as they can save you further money. Developer incentives could also be worth looking into.