Homebuyers

Fall Homebuying Checklist: Smart Ways to Save

Fall could bring more than cooler weather for homebuyers. As some properties linger on the market, sellers may become more willing to negotiate, opening the door to savings.

But getting a better deal isn’t just about paying less for a home. From mortgage rate buydowns that lower monthly payments to spotting costly repairs before closing, here are seven ways to save this fall.

1. Check the home’s original asking price

A listing may look like a bargain after a price cut. But how much has the seller lowered the price, and is there room to negotiate further?

Gia Freer, broker of record at PBP Real Estate in Boca Raton, Fla., recommends checking the original asking price rather than relying on the current listing price alone.

Before making an offer also, review the property’s listing history, previous reductions, and how long it has been on the market.

A property that’s already been reduced and has spent weeks on the market may offer room to negotiate, particularly if comparable homes have sold for less.

2. Negotiate more than the purchase price

A lower asking price isn’t the only way to get a better deal.

Depending on the seller’s circumstances, homebuyers may be able to negotiate closing cost assistance or terms that make purchasing easier.

“As homes hit more days on the market, sellers may be more open to negotiating than before,” said Jennifer Long, a real estate professional with Christie’s International Real Estate Sereno in the Silicon Valley-San Francisco Bay Area.

For example, a seller who won’t reduce the asking price by another $5,000 might agree to contribute that amount toward eligible closing costs instead. That could leave the homebuyer with more cash after closing.

Long also suggests negotiating a smaller earnest money deposit or a longer closing timeline.

3. See if a mortgage rate buydown makes sense

A seller contribution toward a mortgage rate buydown could help reduce monthly payments.

A mortgage rate buydown lowers the interest rate temporarily or permanently, depending on the arrangement.

Consider a $320,000 mortgage with a 30-year fixed term. At 7%, the monthly principal-and-interest payment would be approximately $2,129. At 6%, it would fall to about $1,919.

That’s roughly $210 a month in savings, excluding taxes and insurance.

Buying down a mortgage rate has an upfront cost, however, and seller contributions are subject to loan program limits.

4. Explore mortgage options that could lower upfront costs

Choosing the right mortgage program could make a difference in how much cash a homebuyer needs upfront.

Conventional loans may allow qualified homebuyers to put as little as 3% down. Federal Housing Administration (FHA) loans generally allow down payments as low as 3.5% for eligible borrowers.

U.S. Department of Veterans Affairs (VA) loans offer eligible military borrowers and veterans the opportunity to purchase with no down payment. U.S. Department of Agriculture (USDA) loans also offer eligible homebuyers no-down-payment financing in qualifying rural and certain suburban areas, subject to income and property requirements.

Each program has different eligibility requirements, mortgage insurance or guarantee fees, and other costs. A smaller down payment can help preserve savings, although it doesn’t necessarily mean a lower overall borrowing cost.

Getting pre-approved for a mortgage can help homebuyers understand their options and establish a realistic price range before making an offer.

5. Use the inspection to uncover future expenses

A home inspection can reveal more than immediate repairs. It can also identify expensive problems that may emerge after closing.

This could include a roof at the end of its life. While it may not need replacing immediately, it could present a significant expense within a few years.

Other potential trouble spots include drainage, foundations, and electrical systems.

Inspection findings and contractor estimates can help homebuyers negotiate repairs or credits before taking on those expenses themselves.

6. Get seller concessions in writing

Any negotiated seller credits should be properly documented before closing.

“Any sort of concession should appear in the purchase agreement or an addendum to the agreement, and should comply with the lender’s guidelines,” said Nick Heimlich, founder and attorney at Nick Heimlich Law in San Jose, Calif.

Heimlich recommends confirming with the lender and closing agent that the credit is permitted under the mortgage program.

Getting those details settled early can help prevent unexpected expenses or complications at closing.

7. Look beyond the monthly mortgage payment

Two homes with similar asking prices can have very different ownership costs.

Property taxes, homeowners insurance, homeowners association (HOA) fees, and maintenance can significantly affect the monthly budget.

Blaire Solace, of Asset Protection, recommends evaluating the full cost of purchasing and maintaining a property rather than focusing solely on its listing price.

For example, a home with annual property taxes of $2,000 costs approximately $167 a month in taxes. Another with a $6,000 annual tax bill adds $500 a month.

That’s a $333 monthly difference, even before factoring in insurance or HOA fees.

Comparing the full monthly payment and anticipated maintenance costs can help homebuyers determine which property offers the better value.