Buying a home can be an exciting experience and adventure that opens a new chapter in your life. But it is also usually enormously expensive. And that expense goes far beyond the monthly mortgage payments. There are also big upfront payments like the down payment and closing costs, as well as recurring expenses like insurance, property taxes, and maintenance. So it’s wise to save money anywhere and everywhere you can. Here, then, are 5 ways to save money when buying a home in Santa Cruz.
1. Buy at the Right Time of Year
Spring and summer are the hot times in the real estate market. That also means that buying a home in Santa Cruz in the fall/winter will likely save you money.
Buying a home in Santa Cruz during the fall or winter “can be ideal for cash-strapped home buyers. Once summer ends, sellers get more motivated. They usually lower their prices and provide an opportunity to get a deal. . . . [T]here’s also less inventory during the fall. Many sellers want to avoid moving during the holiday season. This gives you more room to negotiate when you do make an offer.”
“Winter is usually the cheapest time of year to purchase a home. Sellers are often motivated, which automatically translates into an advantage to you. Most people suspend their listings from around Thanksgiving to the New Year because they assume buyers are scarce. Sellers who do list at that time usually want to sell as soon as possible. They may even be more willing to throw in extra perks such as appliances and window treatments.”
There are also usually fewer buyers at this time of year, so you’ll have less competition. The upshot is that “you may be able to get the most bang for your buck. Desperation can start to set in for sellers around [this] time. This is particularly true of sellers who want to sell their home and get a tax write-off before the end of the year.”
Still, local markets vary, and the best buying season for saving money can vary from market to market. So be sure to contact a Santa Cruz agent at 831-588-2334 to find out the best time to buy in the area you’re interested in.
2. Improve Your Credit and Save for a Bigger Down Payment
You can also save money when buying a home by improving your credit score and paying more down.
Your credit score will have a pretty profound impact on the mortgage interest rates and lender fees you’ll have to pay. If you can improve your credit score, you will reduce your monthly mortgage payments because you’ll pay less in interest. A better score will allow you to qualify for a lower interest rate.
When it comes to the down payment, you should aim at saving enough to pay 20% down. “Being able to make a down payment of at least 20% isn’t always easy, but it can save you money in the long term. Besides potentially lowering your overall monthly mortgage payment, a sizable down payment can also help you avoid the need for private mortgage insurance (PMI).”
3. Negotiate the Closing Costs
One of the best tactics for saving money when buying a home in Santa Cruz is to negotiate closing costs. Closing costs include things like lender fees, title fees, appraisals, escrow fees, and attorney fees and typically run about 2% to 5% of the purchase price. So for a $200,000 home, you could wind up paying $4,000 to $10,000 at the closing table.
But these substantial costs can be negotiated, with the result that you may be able to save thousands of dollars. So be sure to negotiate with the seller to pay some or all of the closing costs. To find out how to do this, contact a Santa Cruz agent at 831-588-2334.
4. Buy Near a Good Area
A little known way to save money when buying a home is to buy near but not in a good area. Here’s why . . .
“One of the best investment decisions is buying near, but not in, a hot neighborhood. Sometimes it’s just not practical or affordable to buy in the hottest communities, but looking nearby might be the best move. You can often save 20-30 percent on the purchase price. And most importantly, you’ll see faster appreciation rates.” So buying a home very close to but not actually in an up-and-coming neighborhood will allow you to pay less initially and still benefit from the appreciation advantages later on.
5. Hire an Experienced Local Agent
Hiring an experienced Santa Cruz may be one of the best things you can do to save when buying a home. A good agent will have top-notch negotiating skills to help you get a better deal, as well as a thorough knowledge of the local market to find better deals. In addition, your agent can negotiate various aspects of the contract to help you save even more. So if you’d like to save money when buying a home in Santa Cruz, contact us today at 831-588-2334.
