Top Money Saving Tips When Buying Your Home in the Boston Area
The team sat down and considered various angles to assist Boston home buyers in saving money on their journey home. This isn’t an exhaustive list, but we believe it is a good starting point and might be a Part 1 on more ways to save as a home buyer. Applying some of these tactics may help you save thousands on your home purchase. So, let's get started.
1. Look for homes with more than 20 days on market
Especially with such little home inventory for sale, if a home hasn’t accepted an offer within 20 days or less there is likely a mismatch between what the seller and prospective buyers want. While sellers may have clout, with time any true seller will decide to negotiate. If you’ve found a home you like, but might be overpriced or have deferred necessary renovations (which you are not afraid of), you should consider making an offer you are comfortable with. You never know until you try and you may be able to take a haircut off the price!
2. Look to buy a home off-season
Real estate markets can vary throughout the year. Consider purchasing during the off-season or when the market is slower, as sellers may be more willing to negotiate on price. In Boston, the off-season tends to be during the end of Summer in August and from November after Thanksgiving thru early March. When sellers are marketing their home during these off-season months, it can be a sign that it is crucial for them to sell.
3. Make an offer with less contingencies
We talked about this in a recent blog, but making a ‘clean offer’ can sometimes give you leverage in lowering the price of your offer. Less contingencies or stipulations means less risk on the table for the seller. If that’s what they desire most, maybe they are ok with taking a price cut in return for a smooth transaction. It’s a strategy that has worked for us on several occasions!
4. Consider Buying a Multi-family Property
If you're open to the idea, purchasing a multi-family property where you can live in one unit and rent out the others can help offset your mortgage payments.
5. Buy more square footage
This one might sound backwards, but remember in ECON 101 they would talk about the law of diminishing returns? Well, in a given neighborhood, the cost of a 5,000 sq ft home vs. a 3,000 sq ft home would be more in overall price, but it should be lower in price per square foot. At some point, the value of each additional square foot lowers. In other words, feel free to pack in more square footage if you desire and especially if you have a larger household.
6. Get an ARM instead of a fixed rate mortgage
Adjustables rate mortgages are lower in interest rate versus 30 year fixed rate mortgages (especially in inflationary cycles) because they have a fixed rate for a shorter period of time such as 5 or 10 years. If on average, homeowners own their home for 7-10 years, perhaps a 30 year fixed rate isn’t really needed? It might feel better to have your interest rate fixed for longer, but you are paying more for it over the long term.
7. Down Payment Assistance Programs
Investigate if there are any down payment assistance programs available to you such as Mass Housing. These programs can help you cover a portion of your down payment, reducing your upfront costs. The best way to gain access to these programs is through a lender you might be working with. We can also introduce to you many in the Boston area.
Buying a home is unaffordable for many in Boston. At Nuhom, we continue to think of ways for you to save money on your journey home. Using Nuhom to purchase your home will save you 1% of the home’s purchase price. We’ve averaged $10,000 in refunds back to each and every one of our home buyers. Check us out to learn more!