Cheap Homes
The inexpensive home is the Rodney Dangerfield of the real estate world. It doesn't get any respect. There's a strong pressure in society to buy the biggest home you can possibly swing a mortgage for, with all the fancy amenities you could want. Anybody who would settle for a less expensive home must be a loser.
In fact, the cheap home has plenty to recommend itself for the budget-minded buyer. Instead of being stuck with a monthly payment that stretches your paycheck to the limit, leaving you continually stressed about how you'll cover your other bills if you're suddenly stuck with an unexpected expense, you'll have a housing expense that fits comfortably within your other bills. You will have money left to put towards savings, and maybe even some extra to pay down the principal of the mortgage and reduce the total amount of interest you pay over the life of the loan. By buying a less expensive home that fits your needs, you can actually end up money ahead instead of spending most of your life house poor.
Cheap homes can be found all over the country, although they are more common in some areas than others. Because so much of the commission-driven real estate industry is geared toward getting people in the most expensive home they can possibly finance, you'll have to do your own homework to locate one that's right for you. Some are in great neighborhoods, giving you excellent amenities such as high-caliber schools, good public libraries and public transportation systems that actually take you where you want to go, not to mention being close to where good jobs are plentiful. On the other hand, many towns where housing costs are lowest are also places where the job market is weak. They can be great places to retire to or to live if your income isn't dependent upon presenting your physical presence at a workplace (for instance, a freelance writer or Internet marketer), but if you're planning to do the regular 9 to 5, you're going to be looking at trouble.
Even if you're not making a major move, you can save a lot on housing by buying a home that is less expensive, but still fits your needs, within your own community. You may need to be willing to look at neighborhoods that aren't quite as upscale as other people of your income bracket choose, or be willing to look at houses that are somewhat less than perfect. Also, you need to be able to take your time, because you never know when a house will suddenly appear on the market priced tens or hundreds of thousands of dollars under its real value because its owner needs to unload it quickly (for instance, they are moving, or they are heirs who want an estate wrapped up quickly).
A lot of people start getting nervous when you talk about buying cheap homes because they think it has to mean buying a run-down place or moving into a creepy neighborhood. You can get a cheap home in a great neighborhood, if you are willing to shop around and look at a wide variety of houses in different neighborhoods. You can also find places that are structurally sound but are undervalued as a result of cosmetic issues that are readily fixed (for instance, trying to properly stage a house to maximize the selling price is often almost impossible for couples who both work and have small children).
You can also save a lot of money on a house if you know how to negotiate with the selling real estate agent. Although a home may have a higher price than you are willing to pay, you can shave quite a bit of the price off by skillful negotiating. The most important key to getting a good deal is to never let them know how much you want that house. If you can give the impression that you're perfectly willing to walk away and not look back if the prices isn't right, they'll be willing to work with you to make the sale.
If your credit is excellent and you have a fair amount saved up for your down payment, you can pay the full price of a home and still end up spending less than someone else might spend. Although price is an important issue to consider, financing also plays a major role in the affordability of housing. If you can get a lower interest rate, you'll save a lot of money compared to someone whose credit is marginal and is stuck with a really bad rate and expensive PMI. Because financing is such an important part of a home's affordability, it is essential that you do your homework and research all your options so that you get the most affordable loan for your particular situation.
Because homes that are undervalued for their condition and location tend to sell very quickly, you will need to keep a constant watch on the market when you are house hunting. When you come across a listing for a cheap home that looks like it might fit your needs, you need to be able to respond right away. Even a few days' delay can be long enough for someone else to swoop in and buy it, especially if they're in the business of buying undervalued houses, fixing them up and staging them for maximum curb appeal, and then selling them at a premium. Contact the agent representing the seller, take a tour of the home, then decide if the price and the features are indeed what youíve been looking for. If you're not satisfied, be ready to walk right out the door and start looking for another one.
With some patience and careful attention to the market, you can get a dream home for a lot less than most people are paying. You just have to be willing to broaden your horizons and not get fixated on any one home.
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