Tips For Saving Money When Buying A Home

Dated: 09/07/2020

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Tips for Saving Money When Buying a Home

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If you’re a first-time home buyer, or even a 2nd or 3rd time home buyer, then you know that the process of buying a home can be an expensive one. Buying a home in Pinellas County and the Greater Tampa Bay area is a fantastic investment! To help you make the best choice, we’ve compiled a list of several savvy ways we help our clients bring down their overall costs and expenses when buying a home. 

Read below to see how we do it:

Shop More Than One Lender- To start, always ask a lender for their best rate with NO DISCOUNT POINTS. Take that rate to at least 2 other lenders and ask for the same thing to see which one is really giving you the best rate without a ‘buy down.’ It’s ok to buy mortgage points later on if you think you’ll be in the house for at least 5 years, in our opinion. To really compare rates apples to apples between lenders, start with quotes that have no mortgage points. This will avoid any confusion and make it easier to initially compare the rate and loan fees you’re really being charged by each lender.

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Don’t Rule Out Newer Homes- Did You know that homes built after March 2001 in Pinellas County, FL are built to newer building codes? Why is this important? It means your homeowner’s insurance rates could be cut in half. Seriously. I used to live in a beautifully remodeled Rutenberg Rancher block home that was built in the 1970’s. The annual homeowner’s insurance was about $2400/year (or $200/month) for that house. When my husband and I moved to a home that was 80% larger but built in 2003, we were prepared for a huge spike in our new homeowner’s insurance premium. Talk about being shocked when the rate came in at just under $1200/year! I even called the insurance company to make sure that there wasn’t a mistake, as similar sized homes had been closer to $4800/yr to insure. The insurance company explained that our new home was built to new codes, so the rate would only be about $100/month on our new policy vs $400/mo on an older home that was the same size. While a newer home could cost a little more up front, the savings on your monthly payment could actually be more than if you bought a slightly cheaper home that’s older.

Newer Built Townhouse We Listed and Sold

See a List of New Construction Homes by Clicking Here

Try to Buy A Block Home Vs. A Wood Frame Home If You Can- Again, your homeowner’s insurance rate could be DOUBLE or more on a frame home vs a concrete block home. Block homes often withstand hurricane winds better than frame (remember that story about the 3 little pigs??), are subject to less damage from pests, and will require less maintenance over time than a frame home. *Always have your Realtor verify if a home is block or wood frame as well by looking at the public tax records. Many 'For Sale By Owner' sellers and inexperienced Realtors have put this into the MLS incorrectly in the past, believing that exterior stucco or a faux brick exterior means a home is block. In reality, it could be wood frame.

Think About What You Can Live with Now and Fix Later- If you’re on a tight budget, it can be hard to find the perfect dream home, especially in today’s competitive housing market in the Tampa Bay area. I’ve always bought homes with ugly bathrooms or a dated kitchen that needs some updating, to keep the initial purchase price down. Those are just 2 things my husband and I decided early on that we can handle later. Apples to apples, you’ll pay less for a home that needs a new kitchen or bath, pool refinishing, landscaping, etc. If you can live with it now, save some money for 2 or 3 years, then remodel it exactly the way you want, saving money along the way and getting into the neighborhood you want. For Example, The home below has an older kitchen, but the sellers put in $4k of updated appliances. The buyers will save some money on a kitchen renovation later on by just updating the cabinets and counters here, while re-using the newer stainless steel appliances. 

Older Kitchen with Updated Appliances

Use an Experienced Realtor- Using a Buyer’s Agent to find a home is 100% FREE (or at least it is on our real estate team). As a home buyer, it costs you nothing to use a great Realtor. Find a Realtor with local knowledge that will be able to find you great options AND negotiate on your behalf. When I show homes to buyers and we see one they like, the first thing I do is pull the nearest comparable home sales and do a quick analysis of the neighborhood. The initial info that will help us put in a competitive offer includes how fast homes are selling in that neighborhood, how close to the list price are buyers paying on average (aka, if the majority of homes nearby are selling in 3 days and for 97% of the list price, you likely only get 3% of wiggle room on price and need to move fast on an offer), if the home is in a flood zone (this is an extra insurance expense to take on), and if the listing agent for the property has seller disclosures or a list of improvements to the home we can review before placing an offer. All this info, plus more, can and will help you find that perfect home while ensuring you’re not over-paying for it. An inexperienced Realtor may not know how to get you the best deal.

Shop Around for Homeowner’s Insurance- Once you get through your home inspection and have a 4-point inspection and wind mitigation report in hand, send that info out to 3 different homeowner’s insurance agents and wait for the best quotes. PRO TIP- pay attention to the hurricane deductible. Many Florida insurance agents will quote you a low rate with a 5% hurricane deductible. If you’re on a budget and your $200,000 home is damaged in a hurricane, this means you’ll pay a deductible of about $10,000. Which is way too much for the average home buyer, in my opinion. Ask for quotes with a 2% hurricane deductible only, then see what those rates come in at. On a $200,000 home, that’s a $4,000 deductible vs the $10k above. Be sure to check with your auto insurance company as well to see if they can save you money on both policies in a bundle deal.

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With these tips above, it’s possible to save THOUSANDS of dollars on your next home purchase and future home expenses. If you’ve been thinking about buying a home, contact us today so we can discuss the perfect home buying timeline for you, while also helping you save on costs along the way.

We develop custom plans for all of our real estate clients, regardless of budget or timeline, which is why over 70% of our business is from returning clients and their friends & family. Find out how The Sandy Hartmann Group of Keller Williams Realty Seminole does home buying differently and call us today.

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Andrea Hartmann

Andrea is the Managing Partner of The Sandy Hartmann Group. Andrea was born and raised in the Tampa Bay area and is a licensed Realtor with over 15 years of Marketing and Finance experience, holding ....

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