I’m Ready to Buy a House, But Can’t Afford Much: How Do I Find Cheap Houses?
We all know someone who’s amazing at finding the best deals around. They don’t have to wait until Black Friday to score a cheap television, and they shop at thrift stores but always look like a million bucks. Is there a way to do that with real estate, where finding a cheap home can save you thousands of dollars in interest and fees?
Lauren Rosin, a real estate agent in Arizona who works with investors looking for deals, advises buyers looking for cheap houses, “Partner yourself with someone who’s in the market, not someone stuck on the multiple listing service (MLS).”
“Most of my investments are off-market, and by the time they hit the MLS, they get bid up,” she adds.
If you’re trying to figure out how to find cheap houses to buy, take a look at some of our tips and use them to form a house-hunting strategy.
Finding cheap houses: Homes currently for sale
When looking for a bargain in the current market, it’s important to know what kinds of properties are typically priced lower. This requires looking at MLS listings more closely and checking a few government records. Here are the types of homes you must keep an eye on to snag a great deal in today’s market:
Homes that have been on the market for a long time: Those sellers are usually willing to make a deal, particularly if the buying season in your area is almost over and they need to move. Along with a higher number of days on market, you might see a recent price reduction. If the seller has dropped their price, this likely indicates two things: they have wiggle room in their asking price and they haven’t received any offers.
As-is homes: These are excellent options if you’re handy and willing to put in the work. “As-is” in listing descriptions is generally a clue that the home is a fixer-upper you could buy at a steal. But be careful that you’re not getting in over your head, and make sure to still have the home inspected. You could lose the money you save on the home’s purchase price on repairs necessary to make the home livable.
Vacant or inherited homes: Some cities publish a vacant housing list, which you can find on the city website. These lists will have categories of one, two, or three, which indicate how long the home has been vacant and what condition the home is in. Before buying off this list, be aware that in some jurisdictions, homes that make it to category three — the worst level — must become fully code-compliant before the city issues a certificate of occupancy.
Possible inherited homes: Read your local obituaries, then search property tax records to find the deceased’s property. While they might need some cosmetic updates, they’re unlikely to be in as rough shape as a category-three vacancy. Relatives of a deceased person might just be looking to get rid of the property — and its responsibilities — quickly and for a fair price.
For-sale-by-owner listings: FSBO homes could also represent a potential bargain. Sellers are already saving on the real estate agent’s commission, so they don’t need to make as much on the sale. But without an agent, they might have an inflated idea of their home’s worth, and you might have to educate them on the market.
If you’re truly having no luck, expand your search area to include farther-flung neighborhoods. When home shopping on a budget, you’ll need to be flexible. Areas further out from urban centers could have lower home prices.
