House-hunting expenses and how to minimise them (part 1)

by Chris Lang on December 12, 2012

Real estate ads in on a newspaper page

Not too long ago we have discussed various real-estate related expenses (be that renter’s, home buyer’s or home owner’s). There is one more set of expenses left to cover: the house-hunting expenses.

Home-buying is (usually) a long, nerve-racking process that on average takes about 6 months: 4 months of searching and, assuming you’ve found your dream home and your offer was accepted, another 2 months before the settlement occurs. During the months when you’re actively searching for a house, there are inevitable expenses that will eat away at your budget.

Here they are:

Expense: Newspapers. Not everyone is friends with the Internet and many people prefer to go through ads in a newspaper. Another reason to check the newspaper ads is to find houses for sale by owners (as opposed to the estate agents). Advertising on the Internet is very expensive for the owners-sellers (I have heard of $600 for a month of running the ad on a high-profile real estate website) and they prefer to advertise in the newspapers because it’s cheaper.

How to minimise it: Get a subscription. It is possible to subscribe for weekends only and still get the newspapers cheaper and delivered to your door.

Expense: Phone calls to agents. As a part of the research (or due diligence, the term investors prefer) you will be ringing the estate agents to find out all sorts of details you’d like to know (how much land is there, what is the price-range, when is the next inspection, etc), anything that is not in the ad.

How to minimise it: the best way is to keep a notebook where you write down all the information you have about all the houses you’re considering. Also a good idea is to have a list of questions in front of you when talking to the agent. This way you won’t forget things and won’t have to call the agent twice about the same house.

Expense: Petrol. You will go to a lot of inspections and chances are that you will drive to most of them. That means that you’ll use a lot of petrol and it’s a considerable expense.

How to minimise it: although most of the inspections are during weekends, you don’t have to buy petrol in the weekend when it’s the dearest. Try to fill up on Wednesday, before the prices start to climb and get to their peak on Saturday/Sunday. You could also try and group the inspections by location, if possible, so that you can inspect several properties in the same suburb while you’re there. It will reduce the distances you drive and thus save you time and money.

Hang on, part 2 is coming with the rest of expenses and ways to reduce them. Subscribe and you won’t miss it.

{ 2 comments… read them below or add one }

Chris February 10, 2009 at 11:34 pm

This post has made it to the Carnival of Investing strategies

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Brian December 12, 2012 at 5:25 pm

If they won’t pay an agent and too cheap to pay for an internet advert I reckon they will be a pain to deal with and I wouldn’t be inspecting their property.

If you bought their property they would be one of those vendors who took the plants out of the garden and took the light bulbs with them!

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