Buying a home is a smart decision which will get you out of paying rent that only builds on your landlord's real estate equity. When you are ready to buy a home for sale and start building your own equity, finances may be tight, but it is possible to save some money and get a good deal on your home purchase. Here are some tips to help you do this.
Buy a Fixer-Upper
Buying your first home is an exciting process and you may want to buy a home that is move-in ready, but when finances are tight, conceding a bit on the home's condition can help you save money. A home that is in need of repairs, especially cosmetic repairs can allow you to buy it at a discount and fix up the home slowly over time as you can afford them. Buying a home with its plumbing, electrical, and other necessary systems working, the home is livable but just not as nice looking as a move-in ready home.
A home with an unfinished basement or attic space is also a home that has potential equity. This means you will be able to finish these spaces in the home and immediately increase its value. Because these updates and improvements can be done slowly, you can complete them as you save money or use your tax refund to complete them.
Buy from a Financially Distressed Seller
Another way to save some money on a home's purchase price is to buy a home from someone who needs to sell their home as soon as possible. This type of seller will be motivated and not as picky about getting a certain price as other home sellers may be and may accept a lower offer from you to buy their home. These types of sellers include those having to move out of the area for work, or due to a divorce, or a loss of job, for example,.
Another way to save money on your home purchase is to buy from a seller who is having trouble making their payments and are behind on them. Sellers who are behind on their mortgage payments and the home is at risk of going into foreclosure may be more open to consider your discounted offer.
Some motivated homeowners will list their home for a price less than what they owe to the bank in the process called a short sale. You can get a good deal on a home with automatic equity in this type of situation. But just be aware that both a short sale and a foreclosure home process can take longer than traditional sales because you are dealing with the home's bank and will need to get the transaction approved by them.
