How I Bought a Home on My $37K Teacher’s Salary

published Oct 13, 2018
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I started my first teaching gig only a few months after finishing college. At first, I was thoroughly unprepared, but two years later, I was confident enough to land a coveted job teaching English at one of the best high schools in the county—a 30-minute drive south of my grubby apartment in Daytona Beach, Florida.

After a few too many days of dragging myself out of bed at the crack of dawn to beat traffic, I decided I had to move closer to the school in New Smyrna Beach. This brought up two huge problems: 1) All of the apartments I could afford didn’t allow dogs (I have one), and 2) the average listing price in New Smyrna was $285,000. With my salary, I could only afford about half of that. Many friends suggested I keep looking for a better apartment, but I had another idea: homeownership (even though it seemed like it was out of the question).

By then, I had managed to save around $20,000, part from my own scrimping, and part from a small life insurance pay out I received after my father passed a few years before. It wasn’t much and it was my only money saved, but I knew it might be enough for a down payment on a home. My dad had managed a real estate office, and the lingo of buying and selling had worked its way into my brain. I understood I was searching for an accident, an outlier: a house priced lower than it was worth.

Even so, I didn’t recognize it when I first saw it. The $90,000 listing popped up on my search back in 2015, and I admired the house briefly. It was a creamy yellow, shaded by mossy oak trees. The yard was fenced in, and the floors were wood and tile, no carpet. What’s wrong with this place? I thought. The inside must have been covered in mold, or there was a huge hole in the ceiling. No house that cute could be so cheap.

I put the house out of my mind until a month later, when the price dropped, and I decided I might as well take a look. The owner, it turned out, was a professional custodian. She had just lost her job and was desperate to sell. She had also kept the place spotless. The inspector confirmed more of the same: The house was perfect, and it appraised for $25,000 more than the asking price. So I snapped it up before anyone else could.

I know my story may sound like everything just clicked into place, but I think that the biggest factor was that I was knowledgeable enough about real estate to play the game and ultimately come out on top. I think my situation can be duplicated—here are the five things that helped me (and maybe even you) afford a starter house on a shoestring salary:

Spend time looking for houses

It’s tempting to get your heart set on one particular house, but if I hadn’t taken time to look, I would never have stumbled on the perfect home. Look for houses that other people might not be jumping for, maybe because they’re in secluded areas or their agent isn’t spending time to market the place.

Kick the tires

As you’d probably expect, a lot of the houses in my minuscule price range were worse for wear. One house had mold climbing up the closet walls. The yard of another flooded after rain. If you’re unsure about a property, make a visit after a big storm and look at flood maps. Get to know the area, too. Talk to the neighbors. You never know what you might discover.

Become a member of a credit union

When I bought a car the year before I became a homeowner, the only place willing to give me a loan with my microscopic credit history was my credit union. While house shopping, I went back to them again. Though other places were willing to loan me money, the credit union offered me the most competitive rates.

Build your credit

Before I went house shopping, I paid down the balances on my credit cards. I kept an eye on my credit and used Credit Karma to see if there was anything I could do to make it even better. I managed to bump my score above 730 before I even stepped foot into a potential house.

Even though I didn’t have much money, my credit score ultimately sealed the deal on my mortgage.

Be prepared to haggle

I didn’t haggle the house I bought down very much, because it was already priced so much lower than it was worth. But if I was doing the whole thing over again, I would see if I could lower the price even further. It doesn’t hurt to try, especially when trying means possibly saving thousands of dollars.