Insider Secret #2:
Homebuyers – Avoid paying Some ‘Required’ Closing Costs – Keep More Cash in Your Pocket
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We'll talk about two things here:
a.) How to save $300 - $1,000 on your Title Insurance. (Different from your annual homeowners insurance.)
b.) How to save $200 - $600 on up-front costs, required by your lender for home/land survey certification.
Many people are aware they need a down payment. Not as many people are aware that there are also closing costs, and they can, many times, be as much as 3 - 4% of the actual sales price. So it's a very large expense.
There are two simple, yet widely unknown strategies I'm going to teach you. And I'd say probably only10% of all real estate transactions actually apply these strategies - due to lack of
Saving money on your lenders title insurance and homeowners title insurance.
These are not the same as your homeowner's annual hazard insurance - which is totally different, and a part of your normal mortgage payment.
Lenders Title Insurance ... This is a totally separate kind of insurance. It's a one time, upfront fee, and in many cases, it can run as much as $10,000.00. However, on a more typical home purchase price, it's anywhere from $1,000 to $2,500.00.
This merely insures the title of the property against any defects or any problems from the past. The lender requires that you buy title insurance when you get a loan to protect the title to the house and therefore, it protects the money that they loaned you to buy the house.
Homeowner's Title Insurance ...
This is something that is also recommended that you buy for a few hundred extra dollars to cover your personal equity interest in the property from now, into perpetuity.
Some people try to save, by not getting the homeowner's title insurance because they feel lender's title insurance is enough. That's a huge mistake, since you are not personally covered. Don't ever do that!
However, here's what you CAN do. You can ask for a reissue rate on the seller's existing title insurance policy that the seller purchased when they originally bought the house.
This can be done through the contract negotiations when you go to purchase the house. However, be aware that you have to get the title/escrow company, or the settlement attorney (whoever is performing the settlement), to agree to grant the reissue rate -- because it is ultimately up to them, not the seller, A lot of the Title or settlement/escrow companies don't like to do it, but will if pushed. And many settlement/escrow companies don't like to do it
because it may decrease their commissions. But they will do it, if you know the right people ... or if you have the right buyer's agent to guide you.
It can save you 30 to 40% of the title insurance costs. So, if your title insurance is going to be $2,500.00, you can save anywhere from $750.00 to almost $1000.00 right up front on just the title insurance reissue rate.
That's a huge savings!
Saving money on your home and land survey recertification. When you buy a home, the lender requires you to get a survey. The survey can be anywhere from an absolute low of only a couple of hundred dollars, up to a couple of thousand dollars, depending upon how much land is with the property.
I've seen surveys as much as $4,000.00, but for most home purchases, it's going to be in the range of $300.00 - $600.00.
However, a survey has already been done by the seller when they bought the house before you did. So we're going to apply a similar principal that we applied on the Title insurance savings.
We're going to ask the seller to give us a copy of their survey, which they don't need any more. Then we'll be able to see the name of the engineer, who performed and certified that survey.
Now, we can contact that person and ask for a recertification of the survey. Most surveyors have no problem doing this. They will recertify it for as little as 25% - 50% of the original cost.
So, instead of paying $500.00 for a survey, many of the surveyors will recertify the survey they've already performed, by visiting the property to make sure nothing's changed -- for as little as $100.00 - $250.00.
Obviously different surveyors are going to give you different discounts. You can save $200.00 - $400.00 right there. Better in your pocket, right?
To conclude ...
As you can see, with just this one strategy alone, you'll be able to save a nice amount of up-front Cash on your home purchase ... and we have only just begun!
Be sure to check your email often, because in a few days, you'll get your third Real Estate ‘Insider’ secret.
In it, I'll be talking about how you can get the BEST deals in foreclosures, using three different strategies. We'll explore short sales, auctions and also bank owned properties (REO).
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Until next time,