Whether you are buying discount properties (http://blog.memphisinvest.com/blog/bid/88140/Invest-in-Discount-Properties-This-Summer), selling discount properties, or in the market for more upscale real estate, now is a good time to save money on your real estate transactions. Prices are low, mortgage rates are low, and it is still a buyer's market. Most people get that. But what you may not realize there are even more ways you can save money on buying or selling real estate right now.
How You Can Save
1. Reduced Mortgage Closing Costs
Closing costs are lower now than they were a year ago, according to a recent article in CNN Money (http://money.cnn.com/2012/08/06/real_estate/closing-costs/index.htm?iid=HP_LN). Indeed, "The average cost of closing on a mortgage has fallen by 7.4% over the past year, according to a recent survey by Bankrate.com. At the end of June, a homebuyer looking to close on a $200,000 mortgage with 20% down paid an average of $3,754, $300 less than 12 months earlier."
What can explain this savings? Federal regulations are becoming more strict about the accurate estimating of closing costs. Basically, "The regulation, which was put in place two years ago as part of the Real Estate Settlement Practices Act requires lenders to provide a 'good faith estimate' of third-party fees that is within 10% of the actual amount the buyer will pay." When lenders are held accountable for making a more accurate estimate, the savings is passed on to the person paying the closing costs. This can make the cost of real estate transactions a little more manageable.
2. New Methods of Listing Properties
The established system of using a realtor for selling or buying discount properties, or any properties for that matter, is still in place. But now there are some new options available. No longer is the "for sale by owner" option as unscientific as running the vacuum cleaner in the living room and putting a sign in the front yard. Now, homeowners can put their house on the market through a variety of new companies such as Go Flat Fee Realty (http://goflatfeerealty.com/). Instead of engaging a real estate agent with high commissions, companies such as Mississippi-based Go Flat Fee Realty offer inexpensive marketing plans and listing services for homeowners who wish to take a more DIY approach and save some money. Of course, if you want to get the home sold as quickly as possible with a real estate professional, that is still easy to do. After all, the promise of a commission is often what motivates a realtor to sell a property as quickly as possible, for the best price possible, saving you money on continued mortgage payments, utilities, maintenance, and the like.
3. Distressed Homeowners
There are some homeowners who want to get out of their homes quickly, whether they have lost their jobs and are unable to afford their mortgage payments, or whether they want to do something like relocate to another area or simply move into a larger or smaller home. Many sellers are anxious to sell their homes, even for much lower than their asking price.
There are many reasons why now is an excellent time for buying discount properties and saving money on real estate transactions. According to a recent Wall Street Journal article (http://online.wsj.com/article/SB10000872396390443545504577563882778061396.html?mod=WSJ_RealEstate_LeftTopNews), "And for those who can invest in property, rents continue their ascent. Prices are at a 10-year high, with the median unit renting for $710 a month. Real-estate website Trulia found that it is cheaper to buy than rent in each of the nation's 100 biggest metropolitan areas. In other words, if you can buy a home today, you can save the difference it would cost you to rent even if you stay in the home just five years. If you can buy a property and rent it, it is almost certain that the rent will cover the cost of the financing‚Äîand the property will appreciate." Furthermore, if you look into buying discount properties, the rent should more than cover the cost of a mortgage and should give you a nice supplemental monthly income.