Hi Bobbie, where do you recommend I can find a home for under $15,000 in the U.S.A.?
|Photo credit: Basil Gilbert, Melbourne, Australia|
As we've all heard, location is the key to real estate. Usually, it is also the key to getting a good deal. Buying a home in areas where no one else wants to live will definitely save money!
Things that will probably mean an area has cheap houses for you to buy are:
- It is NOT near a major or even a queen city.
- It doesn't have much major industry.
- It is a small town--probably fewer than $2,000.
- The town is not on a major highway.
- It is not in a coastal or popular vacation area.
- It is in a state with a low cost of living.
- It is in an area with little in the way of zoning, ordinances, and taxes.
While you are in the area, look at the houses in person. Weed your list down to one or two good options. Inspect the house(s) or pay to get it/them inspected before making an offer. Yes, this may result in you losing some money by paying to inspect a house you don't actually buy, but that is better than buying a house without knowing what work it needs. The other benefit of having an inspection is that you can quantify why you are offering what you are. For example, with our house we knew we would need to clean up mold, ventilate the attic, put on a new roof, etc. Knowing this helped us calculate how much we could afford to offer on our house so we would have the money left over to fix it up.
Now is such a great time to buy a house. Many houses are being foreclosed upon and property values are way down. To get the absolute best deal, pay in cash and be a savvy negotiator. Begin by negotiating the best deal and then tell the owner you will close quickly and pay in cash in exchange for them knocking down the price even more.
In our situation, we were able to get such a cheap house because I work from home and we didn't care what kind of jobs were in the area. However, now that we have lived here for six months I think there are more employment opportunities than I originally thought. So, be open to what your new area has to offer!
When thinking about buying cheap houses, you hear a lot about auctions and properties for back taxes. Both of these can be sticky situations. I haven't bought real estate with either of these methods, but I plan to in the future. I've been to some real estate auctions and I know there are some rules, specifically surrounding how much money you need up front and how fast you have to get them the money after you win the bid. So, if you go this route, find out all the details in advance from the auction company. As for back taxes, I would probably only do this option if you are really getting a steal of a deal. This is because once you buy the house for back taxes, you could owe other things on the house that the previous owners didn't pay. In our county, I called our courthouse assessor who told me that houses go up for back taxes once a year. She also said that the rules of my county are that you must already be a county resident to purchase properties for back taxes. Therefore, it definitely wouldn't have worked for us to buy our first house in the area that way. However, you can bet that I'll be be on the lookout for deals now that I am a county resident. :)
Our current house was listed for $17,500 through a real estate agent. When we were searching I did a lot of internet searches through real estate agencies by simply typing in the name of the county, state, and the key word, "real estate".
I would say the key to getting a great deal on a house is to be flexible. In fact, be flexible on as many points as you can: location, what you expect from the house, what your willing to fix/put up with, etc. When we bought our house, we had no idea how to fix anything--we just knew we were willing to learn! A funny memory I have is of us driving to our new house after we bought it and my husband reading a book along the way about how to ventilate attics. As soon as we arrived, he put his new knowledge into action and got the job done within the day!
The last thing I would say is to have a house hunting partner who can provide feedback for you (even if they can't go to every viewing with you.) My husband and I are good house hunting partners .This is because I think every house is going to be awesome--I can see the potential in almost anything. He is a bit more cautious and realistic. For this house, though, we were a little flip-flopped and I was the cautious one.
So, that's all I know about buying cheap real estate. Perhaps some of you have advice to add on the subject!
I want to thank my reader for submitting this question. I've been getting a lot more questions from readers lately so you can expect more posts like this. Some of the reader questions I'm working on currently are: What do I do about health insurance? What are the secrets to cooking and loving beans? How do I clothe my family for free?
So what do you want to know? Are you thinking of trying to get a great deal in real estate? Or do you have a different question for me?
To ask me a question of your own, please email me at Bobbie@BudgetingwiththeBushmans.com.