“Buying a property and all of the associated costs will likely be the most money you have ever spent. But with great expense comes the chance to make great savings.”
THE downturn in the property market means those looking to buy a home should aim to “negotiate harder than ever”, an expert has said.
Jonathan Rolande says there are eight ways people can save money when buying a property.
Mr Rolande, from the National Association of Property Buyers, said: “Despite all the doom and gloom out there at the moment about the property market, houses are still being sold. Buying a property and all of the associated costs will likely be the most money you have ever spent. But with great expense comes the chance to make great savings. There are two major ways to save money that will make a big difference and more, smaller ways that will really add up too.”
Here Jonathan shares his eight pieces of advice on how to save money when buying a property:
1. Buy well. This is your main opportunity to save thousands almost before you start. Do your research – you need to be a local expert, knowing all of the property on the market and being registered everywhere to hear quickly about any that come on is vital. Remember that the estate agent is there to get the best price for the owner. Never make an offer and follow it up with “but I’ll pay more if I have to”, the agent will make you pay. Now is the time to negotiate harder, but it isn’t a bargain just because you get money off the asking price – this can be set at anything the owner wants so to be a true bargain, it needs to be cheaper than comparable selling prices. When making an offer, explain the reasons to the agent and be honest. Explain that you are offering less because the house needs a new boiler or has to be redecorated. Get the agent on side. Aim to pay about 3% to 5% less than you think the property could be worth but play fair or chances are, you’ll end up with nothing.
2. Choose the right mortgage. Did you know that the difference between 6% and 5.8% on a £250,000 loan is £9300 over the mortgage term – those small percentages really add up, so get the best deal you can find but these days, nothing is a bargain. Check for redemption fees, admin and service costs that can sour an otherwise good deal. If you have savings, an offset mortgage is a great way to cut the interest each month. Some brokers charge a fee so beware.
3. Find a Government scheme that helps – The First Homes Scheme, 5% Mortgage Guarantee and a Lifetime ISA could be right for you. The ISA pays interest and adds up to £1000 a year from the government. Some banks offer savings accounts that give a bonus when you buy if you use them for a mortgage.
4. Chances are, as you get ready to move you’ll start buying things for the home like a new tv, broadband, curtains and kitchen appliances. Shop around and use a cashback site to boost your savings.
5. Buying a leasehold? Check the cost of the maintenance and ground rent. Ask what is in the reserve fund to help towards big expenses like a new roof – it could be thousands.
6. When negotiating with the seller, ask if they can leave anything such as the washing machine, fridge or even garden furniture. Sometimes it helps the seller too and it will save you the time and trouble of buying yourself.
7. Shortly before you move in, set up broadband, phone, electricity and gas all on competitive tariffs so there’s a minimal time you’re paying the ‘emergency’ higher rate.
8. Check the EPC – it might be worth paying a little more for a property with a good rating, it will save you year in, year out on your heating and lighting bill.