Monday, September 17, 2012

Unexpected Costs -- and Savings -- in our Recent Home Purchase

We were better prepared going into our second home purchase than when we were home-buying virgins. This doesn’t mean that we didn’t encounter a few surprises along the way, but this time we were keeping our eyes open for any possible savings we might be able to recognize as well.

We learned a valuable lesson relating to the relativity of prices when we purchased our first home. We made sure not to get so caught up in the tens of thousands of dollars we were negotiating in price that we neglected other smaller, yet still important amounts.

Here are a few of the ways we cut costs during our home purchase, as well as a few areas in which we found surprise expenses.

Home Inspection
The first quote we got for a home inspection came in at over $300, which we thought was a little pricey for the inspection of a two-bedroom, one bath condominium. Therefore, we contacted another home inspection company. They quoted us $260, but told us of a coupon on their website for an additional $25 off, so our total price paid was $235, more than $70 less than our first quoted price.

Real Estate Lawyer
Real estate lawyers are often just a part of the home buying and home sale process here in the Chicagoland area. However, since our purchase was an all-cash deal, there was very little in the way of stipulations regarding the contract, and we only made one repair request which was hashed out between the real estate agents, I thought the lawyer was getting off pretty easy.

Therefore, I asked for a discount. I thought $450 was a little high considering the amount of work he had to do, and since we had made his life relatively easy with our offer, I thought he could afford to give us a price discount, which he did, taking his rate down to $350 and saving us $100 in the process.

Moving
Since my brother-in-law’s friend is a mover, we were counting on his good graces to help us move. However, some things came up at the last minute that prevented him from assisting us. Had I known he wouldn’t be helping us, I might have reconsidered buying several floors up in a building without an elevator, but that’s neither here nor there.

I had planned on paying him and his helpers around $500 for their services, but instead decided to tackle the job myself. With my wife pregnant, this meant the majority of the work fell upon my shoulders. However, after multiple trips with our SUV (the gas for which cost us about $50), and a few bruises, cuts, strained muscles, some popped pain relievers, and the assistance of a brother-in-law, I completed the task and saved us about $450 in the process.

Mailing and Wire Transfer Fees
There were a few expenses that we weren’t expecting though when it came to our condo purchase. Some of these expenses came in the form of mailing and wire transfer fees. You see, I was unaware that for a cash deal that involved an amount of $50,000 or more, we couldn’t bring a cashier’s check, but instead had to wire the funds directly from our financial institution(s). Finding this out at the last minute resulted in some scrambling to get the necessary documentation to the banks, and a FedEx overnight fee in the amount of $43, plus, two wire transfer fees in the amounts of $15 and $25.

Title Company Services
I jokingly told our real estate agent that I could have rented a palatial suite at a downtown Chicago hotel for what we paid the title company to use their little conference room for our half-hour closing, but I do understand there’s more to their services than just providing the location to close a real estate deal.

I’m not sure if such services were worth the $960 we ended up paying, but at least our cash deal resulted in reduced costs elsewhere at closing.

2 comments:

  1. Glad to know you know better now. ;) Experience really helps, right? This is such a big investment that committing mistakes should be avoided, particularly on the financial side. Having knowledge about loan discounts, origination, and junk fees can save you hundreds of dollars and make you see mortgage as a financial help rather than a monetary burden.

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