A massive wave of movers is driving a huge surge in home sales. If you are one of those intent on moving this year, how do you get the best deal in such a hot market?
The Hot Housing Market
The US housing market roared in 2020. Home sales volume rose 18% to 30% in some regions as residents fled the densest urban areas and sought out larger properties. Along with that has come a significant spike in house prices too.
With extended eviction bans, landlords can’t free up units to release, and even when they can they are not eager to rent when tenants don’t have to pay.
There may be more motivation to move now than ever, and interest rates may be super low, but be sure you know the real costs involved in buying and retaining a home, and where you can save.
The Costs Of Buying A Home
The cost of buying a home goes well beyond the purchase price.
At the time of closing you can also expect to pay for:
- Credit checks
- Home inspections
- Lender fees
- Recording fees
- Escrow fees
- Insurance premiums
- Prorated interest, taxes, insurance and association dues
Don’t forget moving costs and new deposits to utility companies.
Once you’ve bought your home, be sure you’ve budgeted for keeping it too.
The Costs Of Retaining A Home Include
- Monthly mortgage principal and interest payments
- Annual property taxes
- Regular maintenance and repairs
- Replacing appliances
- Condo or HOA dues
Most of these costs go up over time too. So make sure you start out well under budget to account for how fast they can rise.
Getting The Best Deal When Buying A New Home
Even in a super hot and competitive market it is worth negotiating.
It usually doesn’t hurt asking the seller to knock a couple of percentage points off of the asking price.
Most Realtors will also offer discounted commissions if you ask as well.
Then ask for small discounts with all of your other service providers. Insurance agents, home inspectors, mortgage lenders, alarm and security services, title companies and attorneys, and so on. The savings can really add up fast.
Annual Property Taxes
Your annual property taxes will continue to be one of your biggest housing related expenses. They may even be more than your yearly mortgage payments.
Don’t just blindly pay this bill each month or year. Around 50% of all of these bills sent out each year are wrong. Be sure to challenge them, and have them reduced. It could easily save you thousands each year.