Housing is likely the most expensive thing you will purchase in your life, which makes it one of the largest decisions you will make. Before you start looking for a home, you should figure out what you can afford. What if that amount is not very much? What do you do? Luckily, there are ways to find affordable homes even in areas where it seems like everything is way too expensive.
Sort your Results for Affordable Homes
If you are internet savvy, you will likely start your search for a home online. Unfortunately, most of the websites that offer listings of homes for sale feature the most expensive homes first. By the time you get to the slightly lower priced homes you are tired of looking and give up. The affordable homes are usually located on the last few pages, which could mean sorting through 10 or more pages before you find what you can afford. Rather than giving yourself the opportunity to give up, start by sorting the results in a way you can manage – ask for the lowest priced homes first so that you can see the results that have a chance for you.
Don’t Look for Perfection
It is easy to want the home that you purchase to be “perfect” but that does not always equal affordability. There is nothing wrong with purchasing a fixer-upper; in fact, if you do, there are several financing options that will allow you to purchase the home as well as fix it up. A loan like the FHA 203K gives you the funds you need to purchase and repair a home all in one loan with very flexible guidelines, making it easy for many people to qualify for the financing. What this means is you could purchase a home for a lower price than you ever anticipated and have the money to fix it up, making it exactly what you want. In the end, it means that your perfect house does exist and it is to your exact specifications.
Go Rural to Find Affordable Homes
Looking in rural areas might not have been on your radar, but they can save you a significant amount of money. The good news is that the USDA offers a loan program for people in these areas that do not require a down payment, making it even more affordable to purchase a home. The good news is that rural does not mean that the property is in the middle of nowhere in most cases – the rural guidelines from the USDA are much more flexible than you might imagine, so it is worth looking outside the city and suburb boundaries to find a home that might be more affordable, but not inconvenient for you.
Look for Foreclosures
Buying a foreclosure does not always mean purchasing a “dump.” Even if you end up finding a foreclosure that really was taken advantage of, chances are you could apply for the FHA 203K financing and get a loan on a home that does not pass the local codes. This opens up more opportunities for you to find affordable homes to purchase. HUD offers a list of the homes that are up for sale after going through the foreclosure process, so make sure to check back with HUD on a regular basis as these homes usually go fairly quickly since they are offered for a much lower price than the home could eventually be worth.
Avoid the Agents
Last, but not least, try to focus on homes that are “For Sale by Owner.” This way you avoid the markup on the price of the house that accounts for the commission the real estate agent would make upon the sale of the home. In addition, some people that sell their home on their own are not fully aware of the full value of the home that they could be asking, which means they have a lower asking price, which leaves you with more room for a lower offer as most buyers do not automatically offer the full asking price for a home.
It is easier than you think to find affordable homes to purchase; however, you must make sure that you are creative in your thinking. If you head to your local real estate agent and do not offer any alternatives, finding a cheap home might seem impossible. You will have to do some of the legwork on your own and be patient in your search, but eventually the home you can afford will show up.