5 Smart Strategies to Help Shrink Closing Costs
Be Proactive, Informed, and Willing to Challenge the Status Quo
by Radian Title Services
Getting to the closing table can be exhausting. It is easy to go through the motions when your deals are almost over the finish line but finding ways to save during the often-overlooked closing process can significantly impact your financial position.
Do not miss out on untapped potential for savings at closing to positively impact your investments. It is important to educate yourself on ways to help boost your overall returns, especially when dealing with multiple properties or frequent transactions. Here are five strategies that can help you save on closing costs:
1 — Shop Around
Your first option may not always be the best one. Closing costs and fees can often vary greatly from one provider to the next. Do not settle for paying inflated prices and be sure to compare rates from:
» Mortgage lenders
» Title companies
» Home inspectors
» Insurance providers
Small differences can add up to substantial savings, especially when closing on multiple properties.
2 — Negotiate Fees
With some closing costs being negotiable, you can leverage your status as a frequent buyer to seek discounts on fees like appraisals or loan origination. Negotiating these fees may significantly impact your returns. You can also consider timing strategies, such as coordinating multiple closings, to maximize your negotiating power.
Remember, your volume and frequency of transactions may be a strong bargaining chip in such negotiations. Do not be afraid to ask for discounts or fee waivers, especially if you are a repeat customer or bring multiple transactions to a provider.
3 — Streamline with Bulk Transactions
Bulk transactions may offer a powerful strategy to help reduce closing costs. For investors juggling multiple properties, this strategy is not just about saving money — it is about reclaiming one of your other most valuable assets: time. By consolidating your transactions, you may be able to reduce your closing timeline. Services like Radian Title Insurance’s bulk title ordering provides a streamlined operation, helping you close on multiple properties simultaneously. With these services, you will also enjoy competitive pricing, which may free up capital for your next big investment. Time saved is money earned — bulk transactions can help deliver both.
4 — Consider Closing Cost Assistance Programs
Many closing cost assistance programs exclude investors or have owner-occupancy requirements, but that does not mean that there are not other opportunities to capitalize on. State and local government-offered programs may be available that can help investors, especially in areas targeted for economic development. For example, some states offer the following grant programs:
» Historic Preservation Grants
» Energy Efficiency Programs
» Opportunity Zone Incentives
» Community Development Block Grants
The key to identifying opportunities that work for you is to review program terms and understand your eligibility.
5 — Pay Cash if Possible
It may not always be an option, but paying all cash for your investments may help reduce several closing costs. Cash purchases can eliminate or reduce:
» Mortgage-Related Fees
• Loan Origination Fees
• Mortgage Application Fees
• Mortgage Insurance Premiums
» Lenders Title Insurance
» Escrow Account Setup
Though some costs are eliminated, cash buyers may want to still consider paying for certain services, like title insurance or appraisals, for protection.
A Dollar Saved is a Dollar Toward Your Next Investment
Every dollar you save on closing costs is a dollar you can put towards your next big opportunity. By implementing these five strategies, you may not just cut closing costs, but also set yourself up for even greater success.
Be proactive, informed, and willing to challenge the status quo. Do not let closing costs erode your profits; instead, view them as an opportunity to optimize your investments. With careful planning and strategic decision-making, you can turn the closing process into a powerful tool to help maximize your real estate portfolio’s profitability.
