Buying A House: Finalizing The Sale

     Buying a house — if you’re interested in saving money, effort and time, that is — means careful preparation and planning. Even just a few weeks or months of a few hours weekly can pay off in thousands of dollars saved, and a home with far less need for repairs. (Not to mention increased resale value!)

Once you’ve decided on your house, use these ways to save even more:

*Find out what the seller has invested in the property. Check the county assessor’s office records. (Many counties now have these online, making your search even easier.) How much did the sellers buy it for, and when? How much is the place appraised for? Are taxes paid up? Have they taken out any additional loans, with the property used as collateral?

This information not only produces a more realistic idea of what the house is really worth, but it gives you a better idea of how motivated (or desperate) the sellers really are. Once you know that, it’s easier to:

 *Offer less. Even a thousand or two less will give you more in your pocket at closing. Cut down your initial bid if the market’s slower, or you can afford to take the chance of not getting the house. You can always ‘up’ your bid — but you can’t subtract from it.

During negotiations on our first house, we offered $10,000 less, even though the price had already been reduced. We honestly figured that the seller would settle somewhere in the middle. Instead, he took it!

But before that, we lost out on a beautiful place by only $3,000. Granted, we couldn’t afford to increase our bid; we were at our absolute maximum. And the house needed a lot of repairs, including replacing the large picture window. (It was a foreclosure – no doubt that window was shattered out of frustration.)

* Ask for more. Furnishings, curtains, appliances…what could be included in the sale that would help you minimize costs? Getting the dining room furniture thrown in, free of charge, means that you won’t have to buy any. Or if it’s not to your taste, that same furniture can fund a new tv or gas grill, thanks to places like Craigslist. Use it or other online ‘garage sale’ sites to sell anything you don’t need or want. (I still wonder what happened to an antique Ocean Waves quilt top hanging in our foyer — the buyer of House #1 insisted on including it, and the deck furniture, as a condition of the sale. Did he plan to have it quilted for his own use?)

Don’t miss out on other items in the property that could be part of the selling price. This includes transportation items like cars, boats, even scooters and wagons. (Maybe even a horse thrown in!) A swing set or trampoline may delight your family – or help provide more cash for the first mortgage payment.

Does this really make a difference? Ask Kim Kardashian. She may have just sold her mansion for close to the $5 million asking price (she paid $4.8 million for it just a few years ago)– but the terms of the sale included all of the furnishings. Those same pieces, including Kim’s treasured fancy dressing tables, are valued at hundreds of thousands of dollars. If the buyer shows the same canny sense, he’ll soon be advertising them as the “Kardashian collection” for sale to lucky fans at inflated prices.

*Did you hire an inspector? (Hopefully you did. Don’t rely on one produced by the seller — you want this person working for you. ) Take that report… and use it to ask for further concessions. Electrical wiring costs — so does fixing an unstable foundation, replacing floorboards or fixing pipes. You don’t need to change your offer, as long as the seller is willing to allow extra money for these repairs.

*Even if the seller’s unwilling to negotiate, their agent may feel differently. During the negotiating for our House #2, an inspector noticed wiring installed backwards all the way through. (“It’s a miracle the house hasn’t blown up yet,” he said.) Armed with an estimate for rewiring the property, we approached the sellers — only to be told abruptly that they would only take the full price. (House #2 had been on the market for more than a year. We also knew, based on our visit to the local assessor’s house, that these people badly needed to sell.)

By this point, the agent had enough. He quietly talked to our agent. (Yes, we used a separate one to represent us). They both agreed to take less for their fees — and apply that extra money toward repair costs. That difference in price was just enough for us to justify paying the sellers’ price. (Well, their reduced-from-the-original asking price.)

 *Double-check the figures before you sign the papers. Can you:

-Move in later (or sooner) for less? Depends on your situation, of course.

–Get a better rate for not requiring that your previous home be sold first? It may be tough to keep both mortgages paid, until you get a seller for Home #1 — but worth it, if you really want House #2. (It was for us — but meant paying double for three or four months, before House #1 sold. Ouch.)

 -Pay at least 20% down? This saves you from needing required mortgage insurance — hundreds of dollars extra annually.

-Borrow some of the money from family members? They may be thrilled to get a better interest rate on part of their available savings…provided, of course, that you’re a good credit risk. Don’t even bother, if you don’t intend to pay. Being a deadbeat is bad enough. Being one that cheats your parents — or brother, or cousin — is worse.

-Decrease the interest rate? Even a small percentage of a point works out to less over the period of the loan.

-Get a better rate with a 15-year loan? You’ll have to pay a larger sum every month than with a 30-year mortgage. But if the interest rate’s far better — and you can afford it — it can be well worth it.

 -Get the seller to pay any of the closing costs? Every little bit helps.

 -Minimize any ‘research’ or ‘filing’ fees? Mortgage or closing companies will often tuck these in — but they’re negotiable. Read carefully.

–Keep prepayment penalties nonexistent? There should be no penalty for paying extra each month, or paying your loan off ahead of time.

 And finally, read every word of the papers you’re signing. Ask questions, if you’re not sure. Don’t hesitate to cross out (and initial) sentences you don’t want, or agree with. If you sign, you’ll be held accountable to it. You can’t argue later on that you “didn’t know what you were signing;” the law assumes that you took the time to read it.

 All done? Everything signed? It’s time to move in… Welcome to your new home.