03 Feb How to Buy a Big House For a Small House Price
Buying a Nice Home Can Be Cheaper Than You Think
If you are considering buying a house within the next two or three years but are waiting until you can afford the house of your dreams, you might want to reconsider.
With interest rates being so low, and the FHA making it easier for first-time buyers to finance, it’s a great time to invest in real estate. When you combine these incentives with having a strategy to get a great deal on a home you love, owning your dream home is more achievable then ever before.
How can you get a big house for a small-house price? The following tips will reveal the secrets to getting a great deal on your dream house. (Hint: Start early!)
1. Get familiar with house values.
Before you get started, look at the areas in which you want to purchase a house. Monitor the prices of houses in that area until you are fairly comfortable with those values. Your goal is to know the value of homes so well that a great deal will be obvious to you.
Our search tool makes this very easy. When you go to search.capitalgroupco.com, you can find homes by zip code or subdivision, making it easy to narrow in on your desired area. I recommend saving your search criteria, which will give you access to weekly updates for the area so that you can monitor the market until you’re ready to buy.
2. Think outside the MLS.
Searching the MLS is a great way to stay updated with the market, but it’s also where everyone else is looking for a stellar deal of their own. Heavy competition results in bidding wars among buyers, and sellers are more likely to hold out for a good offer.
Your Realtor will know of houses that aren’t publicly listed yet, and they have access to a huge database of homeowners getting ready to sell. The easiest way to get someone to sell you their house before it goes on the market is to ask.
3. Make low offers.
Once you have a good grasp of the current market and the housing trends in your desired area, you can start by making offers that well below the asking price. How low is too low? Consult with your Realtor beforehand to find out their professional opinion. They have years of experience making offers and might even know something that you don’t regarding the property.
3. Expect most of your offers to be rejected.
Even though there is usually some “wiggle room” to negotiate, Realtors help sellers strategically price their home at a fair value using a variety of factors. In most cases, your low-ball offer will be rejected for that reason. However, since you are in no rush to move, that’s perfectly fine for now.
*If there is a property you just can’t live without, it might be a good idea to take step #2 with a grain of salt. Because very low offers tend to get rejected, your offers should vary based on how much you want the house. If you find your dream home and it’s reasonably in your price range, talk to your Realtor about putting in an offer that will get the seller’s attention. There may be other ways to save money on the house, such as getting the seller to pay your closing costs.
4. Wait for a great deal.
In today’s market, if a seller accepts your offer, or counters with an offer that’s 10% or less than the home’s value, you’ve probably found a great deal. You will be able to live in a better house for a lot less than other buyers who didn’t take the extra time to find a seller willing to sell for less.
This strategy will test the patience of both you and your real estate agent. However, when a good offer finally comes along, the extra space you get to enjoy in your new house will make it all worthwhile.
Plus, you will be able to get your finances in order and build your savings for a down payment during the long process.