Real Estate Management

How to Save Money in Real Estate: Tips for Buyers, Sellers, and Agents

Published by in Real Estate Management

“Many people take no care of their money till they come nearly to the end of it, and others do just the same with their time.”

Those are the words of Johann Wolfgang von Goethe, a German statesman and writer who was born in the 18th century. And how true those words hold today, particularly in the real estate business, where it is so easy to hemorrhage money and time.

It’s understandable, of course. Real estate is a complicated business with a lot of ins and outs, and a lot of difficult terms to understand. There are endless expenses and fees whether you’re a homebuyer, a real estate owner, or an agent.

But there are also a lot of opportunities to save a buck or two, so we’ve compiled seven ways to save money in this business that you can take advantage of right away, whether you’re a buyer, a seller, or an agent.

1. Sellers and agents: Don’t pay for listings

There is really no reason to open your wallet to pay for a listing. With loads of websites and companies that serve real estate agents (or sellers who want to do it themselves) out there willing to do it for free, you shouldn’t waste your money on something like that when there are so many other expenses you have to manage.

Save money by listing your property on sites such as Zillow, Trulia, or even Craigslist, where listings are free.

2. Buyers, sellers, and agents: Do your research

Selling a house at the maximum value (or buying at the lowest price possible) requires that you do your homework. The internet is loaded with information on real estate, and you should be a sponge absorbing whatever you can about the market.

How much are similar houses in the neighborhood selling for? What impact do certain amenities have on the home’s value? What kind of mortgage rates are available right now? This information is important to buyers, sellers, and real estate agents alike.

Image via Pixabay

Image via Pixabay

For real estate agents, experience becomes an important factor, as you’ll begin to see savings the more you understand the industry.

If you’re a realtor looking to get ahead, reach out to someone in real estate who has been successful and pick their brain about how they got where they are at, and what lessons they learned along the way.

Do your homework thoroughly before making a real estate deal, which could save you thousands of dollars.

3. Buyers, sellers, and agents: Time your listing

The timing of when you list a home does matter—as it does when you’re in the market for a home. Zillow says that the best time to list a home is in the spring as the weather warms up and people try to get a deal on a house before a new school year starts. Homes sell the fastest and at the highest price during this time.

Keep an eye on factors such as weather and the overall housing market as well. For example, Zillow determined that May was the best time of year to list a home in 2016, but that was because of a low supply of homes that resulted in more competition between buyers.

If you’re a buyer, be flexible and don’t rush into buying a home in the spring. Try to buy when the market is a bit less competitive, like in the winter.

List your property at the optimal time based on market conditions to get the best possible deal.

Image via Pixabay

Image via Pixabay

4. Buyers: Check into mortgage tax credit certificates

A mortgage credit certificate (MCC) can save some homebuyers thousands of dollars by slashing the amount of federal income tax you would owe on the property. The program allows you to get a $2,000 credit each year against the borrower’s federal tax liability over the course of the loan, which could amount to a staggering $60,000 in savings on a 30-year loan.

MCCs are not available in every state, but if you’re looking into buying a home for the first time you should find out if your state allows MCCs, as they can save you tens of thousands of dollars.

5. Buyers: Dump PMI as soon as possible

If you’re paying a low down payment on a home, you will have to buy private mortgage insurance (PMI) to protect the lender in case you default. PMI has a high price tag, typically around 0.5% to 1% of the entire loan amount, or up to $2,000 per year on a $200,000 loan.

You can get rid of PMI by obtaining an appraisal that shows you have 20% equity in the property. You can accomplish that by saving up to pay that much as a down payment, or if you already own the home by paying up to the point that you have that equity. Or, if you’ve done any remodeling that adds any square footage, you may qualify for PMI elimination.

Build up 20% in equity on your home as soon as possible so you can avoid paying for costly private mortgage insurance (PMI).

6. Agents: Take advantage of real estate tax deductions

There are tons of tax deductions you can take as a real estate agent. For example, if you drive between properties and appointments, you can deduct that from your expenses. Marketing and advertising, a home office, office supplies, and even desk fees can also be deducted on your taxes.

Of course, most businesses can deduct those types of expenses. But in the real estate business, you can also get deductions for paying for fees and licenses that are necessary to operate, or even your dues for the National Association of Realtors.

Keep careful track of every expense you have as a real estate professional so that come tax time, you can save hundreds or even thousands of dollars on your tax bill.

Image via Pixabay

Image via Pixabay

7. Agents: Use good real estate management software

We have many real estate management software options listed in our directory—a total of 252 as of this writing. Real estate management software can help you manage your business more effectively and efficiently, which will save you money in the long run.

Using our directory, you can compare software products by their features, how many users would need to use it, and even whether you want a web-based or installed option.

Browse our real estate management software directory to find software that can help you run your real estate business in a more efficient manner.

What easy ways have you found to save money in real estate?

We’re sure many of you in the real estate business have picked up a few tricks for saving money over the years. Share a few of your tips in the comments below, or let us know what real estate management software you use to run your business efficiently.

Looking for Real Estate Property Management software? Check out Capterra's list of the best Real Estate Property Management software solutions.

About the Author

Dan Taylor

Dan Taylor

Dan is a content writer at Capterra, specializing in hotel management, construction and real estate. Outside the office, he enjoys spending time with his family and friends, catching up with the latest offering from HBO or paying a visit to a new place.



Comment by John Klok on

Astounding tips! your post extremely worth to peruse. I like every one of the tips yet particularly I can relate with is utilizing the mail list. I discovered my ex-colleague was searching for a home thus that I found an ideal individual to sell my home.

Comment by Steph Sadatmand on

I do like how you mentioned that when it comes to a real estate agent, it would be wise to get someone you can trust as you would be working closely with them. That is perfect to have known as I was just looking into how I could get a potentially trustworthy real estate agent for me. Once I do find one, I would be sure to learn as much as I can from them too. Thanks!

Comment by Alexa on

I agree with your point we must do a little homework before choosing a buyer or seller.

Comment by Tom Davies | Accelerate Homes on

Great piece! A little something I could share is that we fist do our initial quote estimate based on either our own data or an external source. If the info is uncertain we have even dispatched a person on the ground to actually visit the area for a weekend and further investigate the pros and cons of the area, and talk to locals.

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