4 Ways to Save Money on Your Next Home Purchase

Posted by Chris Penny on Tuesday, July 14th, 2015 at 7:30am.

save-money-on-your-next-home-luxury-houseIt's likely your home will be the most expensive thing you'll have to buy, but that doesn't mean there aren't ways to ease the burden for your wallet. By taking a few extra steps of preparation, you'll have the tools needed to save money on your next home purchase. 

Know What You Want - Do Your Homework

You don't want to waste time with a home that doesn't have what you need, so start with your must-haves and deal-breakers. In real estate, a value item is one that adds property value. You might have your own personal preferences that add extra personal value, such as heated floors, but don't necessarily add property value. Still, if it's something you want, add it to the list for the time being.

You'll need to do some homework on the market as well. If you're not sure how much you can expect to pay for a home with the features you want, you won't have the advantage when negotiating. Is the market starting to increase or decrease in value? How long have other homes been on the market for sale, on average? Do the buyers or sellers have the advantage?

Consider Your Needs First, Then Wants

By now, you have a list of things you really need and things that would be nice. This might even be your dream home, which is an excellent starting point -- now strip away anything you "might need" but probably can live without. That hot tub? It's probably not a deal-breaker, but ugly carpet instead of polished hardwood floor might be more than you're willing to accept. Narrow down your list.

Some features of a home can add property value as previously stated. For instance, nice landscaping can help beautify a property, whereas a pool might not necessarily add any value; this is because most people aren't usually willing to pay much more for a pool, especially in a colder climate. Not only that, but some might perceive a pool as a negative; families might not want young children around it, for instance. What you perceive as a positive and might pay extra for could end with a loss if you try to resell the home in a neighbourhood with buyers who don't want pools.

Regardless of your list of must-haves, remember no home is absolutely perfect. Chances are you'll make at least one compromise. As long as you understand what features of a property are most important to you, what you're capable of living without, and what features can add great value to a home, you'll find it easier to get the right place and save some money.

Build a Wants and Needs List

You've imagined your dream home, and now you've realized there are a few things you don't want to sacrifice; it might seem a little silly, but you wouldn't mind paying a little extra just to get those double-wide mirrors. Or maybe you just need to have fencing already installed. Maybe you need to live a certain distance from work, have enough space in the kitchen or even require wheelchair assistance. Sometimes it's easy to distinguish what you need from what you want. When in doubt, remind yourself: wants are things you can change on your own.

For instance, maybe the walls aren't the right colour. Maybe they're a hideous shade of yellow that nobody in their right mind would have ever picked. Anybody who watches house-hunting television shows has seen couples painfully turn down homes for silly reasons like this, even though it's easy to buy a few cans of paint and get to work. Finding a home that meets your needs at your price point is far easier when you're flexible with how you get the things you want.

Hire an Agent - Stick to your Criteria

The best real estate agent lets you decide what you're looking for in a home; he or she can help you decide which parts of a home are valuable and which are personal touches.

Don't immediately settle for the first agent you come across, unless they happen to be the perfect fit for you! Be sure to talk to a few different ones, partnering with the one who instills the most confidence in you about their ability to find the home you want. A professional avoids common mistakes and will let you know when a red flag comes up during a purchase.

When you do find a property, do your homework here as well. Check public building permits and tax records to learn more useful information. For instance, the roof might look fantastic now, but if it hasn't been replaced in the last 20 years, you're going to end up with a costly maintenance expense in the near future. 

It can seem like a difficult and lengthy process to get the right home, but you'll thank yourself over and over again for taking the time to do it right. In the long run, you'll save thousands on the cost of your home and on maintenance costs.

Photo credit: luxury home

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