Whether you’re in the market for a brand new home or a fixer upper, you need a smart home-buying strategy. Shopping in the city or country for anything from a cottage to a McMansion requires utilizing the right tactics.
Buying a new home is a huge investment. You must invest a lot of time and attention into ensuring that you get the best bang for your buck. However, even on a budget you need to secure the best option. After all, a good home purchase can be a blessing that serves you for many years to come.
Don’t sacrifice quality in an attempt to save a few bucks. Consider these simple but underrated tactics for buying a home on a budget.
Consider Foreclosure Properties
Foreclosure properties can be hidden gems. However, like any other property, you must do your due diligence. Consider these due diligence steps when buying a foreclosure property. Keep in mind that finding the right foreclosure home isn’t easy. When you find the right home, act quickly. Place your offer before another interested homebuyer beats you to it.
Cheaper foreclosed homes usually result in multiple offers. Don’t be surprised if these multiple offers end up inflating the home’s price. This is why it’s critical to set a maximum price limit. Don’t let the thrill of finding an insanely cheap listing blind you into a bidding war. Also, this maximum price limit should take repair costs and closing costs into consideration.
As the old saying goes, everything is negotiable. But it’s not as easy as the slick used car salesmen or the Shark Tank pros make it seem. Good negotiation requires planning. You need to know point A, which is your starting price. You also need to set an ending point, which is your final offer. Any misstep from point A to your ending point, can land you in a stalemate. Here are some pro tips for negotiating:
- Know the home’s features and statistics. It’s wise to have this information listed on a piece of paper. Make sure this information is either highlighted or in bullet points for easy access. During negotiations, emotions can run high. Make the process easier by having all relevant information summarized.
- Know the market. There are times when there are more homes on the market than there are potential buyers. This is prime negotiation time. However, there are also times where there is an inventory shortage. During shortages, it’s harder to negotiate. This doesn’t mean you shouldn’t negotiate at all. It just means you’ll have to rely on your knowledge of the home or the surrounding area as a potential bargaining chip.
Rest assured, home sales have slowed down significantly in recent years throughout many cities. Thus, homebuyers have a little more leverage when it comes to negotiating.
Do Your Research
Before you start shopping for a new home, it’s wise to educate yourself on the basics of making a home purchase. Being more knowledgeable about the home buying process enables you to be more confident and relaxed. This is critical in keeping your mind clear and focused on finding the right home at the right price. Get comfortable with the buying process. Many real estate terms can be confusing, so don’t be ashamed to ask questions. Once you’ve narrowed down a potential new home, you’ll need to conduct thorough research on not just the home but the surrounding area.
You’ll also need to dig a bit into the history of the home, including its sales history. A sales history can provide a benchmark from which you can see if the home’s current listing is inflated. It can also help you predict potential resale value.
In a perfect world, finding your dream home is as easy as checking items on a list. But it’s never that easy. Prepare to make some tradeoffs along the way. I like to compare buying a home to finding an ideal partner. There are areas where you can compromise and there are deal breakers.
Being willing to compromise can help you secure a good option, instead of holding out for perfection. Meanwhile, being aware of your deal breakers can prevent you from settling for less than you deserve. Those deal breakers will vary depending on your values and priorities. When it comes to buying a home, there are some things you should seriously consider as deal breakers.
Some deal breakers to consider include a shoddy roof, plumbing problems, outdated electrical systems, or excessive mold. These issues could all lead to skyrocketing repair expenses down the road. This is why it’s critical to get a state certified and highly rated home inspector. If possible, be present during the home inspection.
The process of buying and selling homes is ever-changing. Technology is now a major part of the homebuying process. The entire process of buying a home takes over sixteen different stages. All of which has the potential of ruining your chances of landing a sweet deal.
So far a number of technology platforms have made the home buying process easier. Both Redfin and Trulia provide alerts whenever a new listing appears. This can give you a competitive edge, especially when you’re on a budget and can’t afford to be a step behind on that budget-friendly home. Trulia also provides a “heat map,” which highlights areas of high crime and long commute times.
As you can see, buying a home on a budget requires the use of numerous tactics. Be prepared to use negotiation, research, and technological tactics to land your dream home without breaking the bank. Knowing your values and priorities can guide you when it comes to making necessary tradeoffs. Lastly, a foreclosure property can be your diamond in the rough. Conduct your due diligence and that foreclosed property can turn into your ideal home, with cash to spare!