$$$ Money Saving Tips
- Negotiating with a Seller
- A lowball offer is not very effective and may offend sellers. When submitting an initial offer, provide a work estimate sheet of needed repairs, the lower end of comparable sales within the last 3 months and a pre-approval letter for the amount offered. If you were a seller and a buyer offers you $300,000 for your home but their pre-approval letter shows they are approved for $350,000, wouldn't you want the buyer to pay you $350,000 instead?
- Once an offer has been accepted and the home inspection is complete, use the inspection report to further negotiate with the seller if there are additional repairs needed. Seller contributions for closing costs are fairly common and not seen as offensive to a seller. Be reasonable with your negotiations so the seller does not feel offended and lowballed. Most lenders allow seller concessions up to 3%, which means $9,000 in savings on a $300,000 home! Ask lenders about their seller concession policy before you obtain a loan.
- Lower Closing Costs
- Closing towards the end of the month will allow you to pay less pre-paid interest. If interest is $50/day, and you close on June 5, you woud have to pay interest from June 6 until June 30 ($1,250), whereas if you closed on the 25th, you would only have to pay interest from June 26 until June 30 ($250). Avoid closing on the last day or two of the month in case an extension for a few days is needed.
- Ask your lender to waive or lower fees such as processing fee or application fees because another lender is offering no closing costs (check with different lenders so you can reference their comopany name if they offer low or no fees).
- Free Money & Services
- FREE Water Heater! Call your electric and gas company to find out what promotions or rebates they are running for upgrading your heating/cooling and hot water system. National Grid in MA for example has been offering $300 rebates for replacing old hot water heaters with a high-efficiency indirect water heaters. Many Energy Star Tax Credits are available for new windows, heating and cooling systems.
- FREE Consulting Services! Run a search on Google.com or Bing.com for your city with the words 'free energy assessment' such as 'Las Vegas Free Energy Assessment' where you can set up a free appointment for an energy efficiency consultant to come do an entire assessment on your home and help you make improvements to save you money (i.e. new showerhead faucet, new light bulbs, optimal heating or cooling temperatures, how to do better insulation, etc).
- Reducing Your Expenses From Hundreds to Thousands of $$$
- If your home was purchased significantly below the value assessed by the city, town or county, call the property tax / assessor's office if they can re-assess your home similar to the purchase price and lower your property tax. This process can take several months.
- Check your city, town or county property tax / assessor's office if you are eligible for residential exemption (the home is your primary residence), which will lower your property tax bill. For 2011, property tax in Boston is nearly $1,600 less for qualified residents.
- When shopping for home insurance, get quotes for both your home and auto as insurance companies usually give discounts for customers with mulitple insurance products. You will also receive a lower insurance bill if no one in your household smokes and you have a home alarm system such as ADT; make sure to mention this when obtaining quotes.
- If you are paying private mortgage insurance (PMI) and purchased your home significantly below market value (as I always recommend), call your lender's customer service and ask if your PMI can be removed (most lenders will say you need to have owned the home for at least 6-12 months). You will need to provide a recent appraisal report showing that your home has at least 20% in equity. Get a free comparable sales report from the real estate agent you've worked with previously before paying for an appraisal report.
- Replace all lightbulbs to energy efficient fluorescent bulbs
and purchase energy star efficient appliances, especially refrigerators since they are always on. $25 - $50 in savings a month is $300 - $600 back in your pocket every year.
