Attention homebuyers! Follow these insider tips to save thousands on repairs and taxes when buying a house.
With the 2019 home tax credit deadline quickly approaching, many first time and repeat homebuyers are scrambling to take advantage of thousands of dollars in government subsidies. However, do not rush out to buy the first house you see. Regardless of government incentives, perceptive homebuyers should always do their research before purchasing a new home.
The Best Time to Buy a House
My friend Andy, who runs a removals company, says spring is always his busiest time. Spring is prime time for home sellers. With tax return in hand, many homebuyers flood the real estate market looking for their dream home. However, if time is not an issue, it may pay to wait a few months. Winter is typically a slow season for home sales.
Since experts are unsure whether recent buying momentum will continue into summer, it may be best to shop around. If the housing market slows in the coming months, home buyers could see some real bargains in late fall and on into winter.
Look for Motivated Sellers
Sellers who need cash are more willing to negotiate. This can be for a number of reasons. Following the recent housing bust, many builders are desperate to sell their inventory of surplus spec homes. Try to learn the seller’s story. If you really like the house, but feel the price is a bit too high, say so. Sellers consider all reasonable offers, especially in an uncertain market.
Buy a Foreclosure
Buying a home for pennies on the dollar can be very enticing, but buyers beware. Most foreclosed homes are sold “As-Is,” which means the seller is not required to fix any defects.
Sadly, in some cases, bitter owners sabotage their homes just before eviction. There are many horror stories of excited buyers who move into what should have been their dream home only to later discover unseen defects. Ever seen “The Money Pit”? Common hidden problems can include termite or water damage, mould and even vermin infestation.
Get the Home Inspected
True Story: A young first time homebuyer bought a fixer upper with some minor, cosmetic defects, hoping to flip the home (fix and sell for quick profit). Since he was planning to remodel anyway, he decided to forgo the £200 inspection. However, while replacing the kitchen tiling, he uncovered massive termite damage to the floor joists. A job that should have cost a few thousand dollars ended up costing tens of thousands.
Always, always, always hire a qualified, licensed inspector to ensure there are not any surprises down the road.
Check for Local Incentives
For example, Arkansas offers a homestead tax credit. Homebuyers simply file a one-time application with the county for their primary residence and up to £350 is deducted from their property taxes every year thereafter, saving homeowners thousands in just a few years.
Do not assume the previous owners have taken advantage of available property tax breaks.
Since the homestead exemption is relatively new in Arkansas, many older homes may not have the necessary paperwork on file. In addition, since the tax credit is transferable, that is, it remains with the property and not the owner, the credit is applied to the new owners’ taxes once all necessary paperwork is signed.
Note: Some tax incentive programs are not well advertised, so be sure to ask a knowledgeable Realtor, or contact the local governing body, for information.
Buying a home is one of the largest purchases most people will make in their lifetime. The key to avoiding buyer’s remorse is to be completely comfortable before signing on the dotted line.