If you want to buy a home, but aren’t sure if your budget can handle soaring real estate prices, we’ve got good news. There are things you can do to stretch your buying power. With the help of your Triangle Trusted Realtor – and these 10 tips – you can become a savvy home buyer without breaking your budget.
1. Get pre-approved for your home loan. This means, fill out a loan application and go through the process of securing financing. That way, when you’re ready to seriously evaluate homes in the area, you’ll know exactly how much home you can afford. And you can prove to a seller that your offer is sincere.
2. Explore creative financing options. During the home loan pre-approval process, ask about ways to get creative with your financing. Low down payment options, first and second mortgage combinations and first time buyer programs might help you afford more funding. In our area we even have access to a program through the United States Department of Argriculture (USDA) that provides 100% financing for people who buy in some areas of the Triangle and surrounding counties. Whatever you do, just make sure you thoroughly evaluate the terms and information about your loan. You want to make sure you're not overextending yourself.
3. Sell your existing home first. Although selling your existing home before finding new real estate to buy can be a little nerve wracking, any inconvenience will be offset by your ability to make an offer with cash in hand. Some buyers will tie the purchase of their new home on the sale of their current property. The purchase is contingent on the sale of a house, and it does cause some concerns. What happens if the first house doesn't sell? Everything could fall apart. If you can eliminate this option you'll be able to negotiate easier. Having your financing in order and your bags packed will give you the advantage in a competitive market.
4. Look for vacant homes. They're usually more likely to be open to a small discount in offers. Perhaps a seller’s job has transferred him out of the area. Or maybe a family purchased a new home before putting their existing one on the market. In any case, a vacant home could be just the deal for a savvy home buyer, so have your Triangle Trusted Realtor look for vacant property in your preferred neighborhoods. And keep in mind, the longer a house stays empty, the greater your negotiating power will be.
5. Look past minor cosmetic fixers. If you’re handy with a paintbrush, a toolset and gardening equipment, consider buying real estate in need of cosmetic fixing. Property that lacks curb appeal or needs minor handiwork or the yard overhauled could end up being the home of your dreams for a price you can afford. You just need to look beyond the ho-hum to see the potential of a cosmetic fixer.
6. Buy a home that’s a major remodel project. If you want to live Inside the Beltline, but you can't afford the extravagant pricing, consider buying a dilapidated home on a fabulous lot. In time you’ll need to gut the existing home and build from the ground up or contract significant home improvements. But in the end your property value will skyrocket. And if your carpentry and other construction skills are well-developed, you can save even more and accrue “sweat equity” during your remodel by doing much of the work yourself.
7. Don’t discount bank foreclosures or short sales. One person’s loss could be your gain if you buy distressed properties. Although the search for a decent foreclosure may take a while, your Triangle Trusted Realtor will be able to help.
8. Look further out. If you can endure a commute, or if you work from home, you should look in the outlying areas and the outlying counties. You can get serious savings, and if growth continues at the same pace, you'll soon be gobbled closer to everything as life will stretch out to meet you.
9. An older, smaller home. Older homes are typically priced much less than newer construction and don’t tend to create buyer bidding wars. If you can enjoy life in an older and smaller home in a neighborhood or suburb off the beaten path, this could be your ticket to real estate ownership.
10. The cheapest house in the best neighborhood. You have your heart set on a specific – and expensive – neighborhood. Maybe it’s the schools that you’re interested in. Or perhaps it’s the close proximity to downtown or the waterfront. In any case, a budget-savvy buyer will look for the least expensive home for sale in the neighborhood. If you’re not in a hurry, you can even play the waiting game to see what properties come on the market, or ask your Triangle Trusted Realtor to go out and find it for you. We do it all the time. We are matchmakers.
Buying real estate without breaking your budget will require research and compromise. On moving day, however, you’ll have the satisfaction of knowing that your homework paid off!