Whether you rent or own the place that you live, chances are
pretty good that a large portion of income goes to pay for it. You
may find yourself wondering how you can save any more money
on your housing. What follow are some ideas to help you save
money on renting, buying, or improving your home, as well as
purchasing major appliances.
Renting a Place to Live
Rental properties (and rates) can vary widely, even in the same
area. Do not limit your rental housing search to classified ads or
referrals from friends and acquaintances. Select buildings where
you would like to live and contact their building manager or
owner to see if anything is available. Remember that signing a
lease probably obligates you to make all monthly payments for
the term of the agreement. As with most other things, weigh
the cost of the rent against other factors, like the area,
convenience, access, length of contract, etc.
Home Purchase
When purchasing a home you basically have three options-you
can use a real estate agent, you can buy a home for sale by the
owner, or you can build a new home. Each has its pluses and
minuses. A real estate agent can help guide you through the
process, and point out good and bad things about the home
you are looking to purchase. He/she can help you arrange
financing and handle most of the paperwork, as well as arrange
for the closing and turning over of the keys, etc. However, you
generally (but not always) will pay a higher price because the
agent's (usually) 6% commission is figured into the price of the
house.
If you choose to use a real estate agent, do not choose the
agent who represents the home you are interested in buying. If
you do, that agent then has a conflict of interest, representing
both buyer and seller, and you generally will pay a higher price.
Instead, select a buyer's agent or broker who will represent
only you. He/she will be in a better position to negotiate a lower
sale price.
Choosing to buy a home for sale by owner may save you
money, but will require a lot more time and legwork on your
part. You will need to do some research to determine whether
or not the home is worth the asking price (information that real
estate agents generally have easy access to). You will have to
arrange for an appraisal and inspection.
Be sure you fully understand the terms of the seller's agreement
before you sign it because you will be legally bound to it. If you
are selling your existing home and buying another, make sure
the seller's agreement on your new home stipulates that your
purchase of that home depends on the sale of your other home.
Otherwise you could find yourself making two mortgage
payments.
Building a home allows you to get exactly what you want, but
beware that not all builders and contractors are the same. Do
your homework and get referrals. Check up on them. Building is
usually a very lengthy process-be aware that promises to build
a home quickly often equate to lesser quality. Finally, also
consider that when your house is done, you'll still have all the
landscaping to do!
Do not purchase any house until it has been examined by a
home inspector that you have selected, preferably one
accredited by the American Society of Home Inspectors (ASHI).
Make it a part of your seller's agreement that your purchase of
the home is dependent upon the outcome of the inspection.
That way you'll be able to legally back out if something is wrong,
such as termites, mold, structural issues, etc.
When shopping for a mortgage, look for a lender that carries
the smallest difference between the interest rate and the
Annual Percentage Rate (APR-what you actually pay when you
figure in the effects of all the fees). Close on your home during
the last two weeks of the month (if you have to finance it). That
way you'll have less interest to prepay, also lowering your
closing costs.
Home Improvement
Think of maintaining your home as protecting your investment.
Home repairs often cost thousands of dollars and are the
subject of frequent complaints. Select from among several well-
established, licensed contractors who have submitted written,
fixed-price bids for the work. Ask for referrals and check on
them. Do not sign any contract that requires full payment before
satisfactory completion of the work.
If you choose to do the repairs yourself, be sure you know what
you're doing. People often meet with injury and even death
when trying to do their own repairs. Get appropriate licenses
and permits as necessary. Take a look at how doing it yourself
might affect the resale value of your home. More than one
home's value has been severely decreased by do-it-yourselfers'
projects that didn't quite turn out right! Decide if the money you
may save is really worth the time and the risk involved.
Major Appliances
One of the best ways to find out about major appliances is to
consult a consumer information magazine, like Consumer
Reports, that is available in most public libraries. It contains
information about specific brands and how to evaluate them,
including energy use. There are often great price and quality
differences among brands. A more expensive, yet more energy-
efficient model may pay for the difference in price rather quickly.
Once you've selected a brand, check the phone book to learn
what stores carry this brand, then call at least four of these
stores for the prices of specific models. After each store has
given you a quote, ask if that's the lowest price they can offer
you. This comparison shopping can save you as much as $100
or more.
From renting to owning (and everything related) we hope
you've been able to glean a few ideas on how to save money
on your housing. And, as always, remember that an investment
of time on your part can generate more money in your
pocketbook.
Chemain Evans is a quality control specialist for Simple Joe, Inc.
Income & Expenses PC software is a Simple Joe product that is a quick and simple way to keep track of your expenses and stay within your budget. Learn more at http://www.simplejoe.com
