If You Want to Find a Good Deal on a House, You Need to Do This
If you’re trying to buy a house right now, you already know that it’s rough out there. Between the limited supply of homes for sale and average mortgage interest rates hovering above 7 percent, buying a house feels like trying to find a needle in a haystack — a very expensive needle, at that.
You might be tempted to give up on your home search entirely, thinking that you’ll never be able to find a good deal in this current market. And while affordable homes are becoming harder and harder to find, they do still exist — if you know where to look.
As you search for a home, try to stay flexible when it comes to location, recommends Colorado real estate agent Kris VanBuskirk.
“Buyers tend to be quick to zero in on their perfect locations in terms of neighborhood, amenities, or distance to work,” she says. “But doing so can put them in a position where they feel stuck paying the list price — or more — in those specific areas.”
Rather than focusing on one particular neighborhood or development, VanBuskirk recommends casting as wide a net as possible. You just might be surprised by what you find.
“There may be multiple neighborhoods or areas that check their boxes, but the one that will get the most bang for the buck might not have been the one they were originally considering,” she says. “I can confidently say that most of my clients looking to purchase a home have started looking with one area in mind and wound up purchasing in a totally different area because they were able to find exactly what they were looking for and didn’t have to pay as much.”
Your real estate agent can help with this, too. If being able to walk to bars and restaurants is on your must-have list, they might be able to point you toward a more affordable area that is just starting to attract buzzy eateries, for example. Or, if you really need to be close to work, they can help you think outside the box and consider a neighborhood that’s on a convenient bus route.
There are very few homes for sale right now, in part because many homeowners are staying put. Many people refinanced during the pandemic and now have super-low interest rates, which they don’t want to give up, says VanBuskirk. On top of that, they can see just how hard the home search is right now and they’re not inclined to sell their house because that means they’ll have to turn around and buy a new one. All this is contributing to a “major lack of inventory,” says VanBuskirk.
If you limit your home search to a specific area, you’ll be making the search even harder on yourself — and your bank account.
“If a buyer is too specific about where they want to purchase, they could be giving themselves even less inventory to consider and feel more inclined to fight for the house they do find in the form of increased offer price or terms,” she says.
As you search for a good deal, keep these other savvy pieces of advice in mind, too.
Be willing to compromise. If staying under budget is your top priority, that means you have to be willing to sacrifice in other areas, such as size or amenities, says real estate agent Megan Micco. Especially if you are a first-time homebuyer, try to take the long view of your real estate journey and set realistic expectations for yourself: You might not find your “dream home” on your first try, she says.
“You’ll always have an opportunity to upgrade in the future, so take that first step as soon as you can based on what your current budget allows,” she adds.
Make multiple offers. The key to getting a good deal is first understanding what constitutes a good deal in your particular city, says real estate agent Scott Harris. One way to do that is to make multiple offers.
“The best way to gauge the value in the market and where the sellers’ heads are is to get under the hood,” he says. “Making offers, getting educated, and understanding value, all go hand-in-hand.
Buy a fixer-upper. If you’re trying to buy in an ultra-competitive market, one of the best ways to get into an affordable house is to find one that needs a little work, says real estate agent Barbara Fox. Although renovations can take time and money, you’ll also get to customize the home to your tastes and reap the benefits of all your hard work when it comes time to sell.
Look for lingerers. Along those same lines, don’t be afraid to bid on a home that’s been sitting on the market for a while, says real estate broker and home stager Monica Breese.