To buy a house for the lowest possible price, find a situation where the seller needs to part with the house more than you need to buy it. The home may be a bank-owned foreclosure that the bank wants to unload quickly, or the homeowner may be moving because of a job transfer. In most cases, a real estate agent can help you locate the best deals on houses.
Keep an open mind when shopping for foreclosures. Although you can get a house cheaply, it's likely to need some work. Try to visualize what the space could be instead of what it is. Because the former homeowners knew they were losing the house to foreclosure, they may have left the house a mess or removed fixtures. They may even have damaged the walls or floor. The house probably sat vacant while the bank completed its foreclosure paperwork. Although many foreclosed homes require updating or repair before you move in, you can acquire a home for half the original selling price, which leave plenty of room in your budget to fix up the house to suit your tastes.
Short sales are similar to foreclosures in that the homeowners are having trouble paying their mortgages. However, short sales occur when the bank is willing to take less than the mortgage balance before starting foreclosure proceedings. The homeowner is usually still living in the house during the short sale process, meaning these houses often are in better shape than foreclosures. Buying a short sale house can be a long, frustrating process while you wait months for the bank to accept your offer, but you can get a nice house in good condition cheaply through a short sale.
Sometimes called "as-is" homes, fixer-uppers often need significant repairs. The homeowners may have used the property as a rental home, or it may have been inherited and left empty for years. Although you should order a home inspection before buying the property so you know the extent of the work needed, don't expect the homeowners to fix any issues with the house. They are selling it as-is and don't want the trouble or expense of a renovation. Use this information to negotiate a lower price on the house.
For Sale by Owner
When a home is listed for sale by owner, the owner is usually trying to save as much money as possible by selling the house at the lowest price possible without adding real-estate agent fees. This could be a homeowner who has been transferred for work, divorced or has already purchased another house. These owners typically are motivated and willing to negotiate on the price. The home is likely move-in ready because the homeowner wants to sell it quickly. If you're in a hurry to buy a house cheaply, this might be the best option. It may not be as cheap as a foreclosure, but it's faster than a short sale and requires little to no work before you move in.
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- Short-Sale Process for Buying a House in Foreclosure
- Buying & Fixing Up a Foreclosed House
- How Does Buying a Short Sale Work?
- What Happens After a Sheriff's Auction Home Does Not Sell?
- How to Buy a House That Is Not Considered Livable
- How to Buy a House From a Sheriff's Auction
- Why Do Properties Become Inactive on Pre-Foreclosure Listings?