There are many things to consider when buying a house. Location, size, and amenities are all critical factors, but the price tag is one of the most important. Here are ten tips to help you get the best deal on the house of your dreams:
1. Check out foreclosures
Before you hunt for a house, try checking out foreclosures! When a bank takes over a home that has been foreclosed on, the previous owner’s mortgage is entirely wiped clean.
This means that this property will come up at a meager price than similar houses in the area. Keep your eyes open for “real estate owned” or “REO” and “foreclosure” in the title of a house ad. Many real estate agents even offer fee-free tours to potential buyers.
2. Research the market conditions
What are the market conditions where you’re looking to buy a house? You can find out by checking out recent sales of similar homes in your area. If you see that homes are generally being sold for more than the asking price, then it’s a seller’s market.
This typically means that buyers will end up with less negotiating power, which means you’ll have to offer a reasonably high price if you want to be competitive. If it’s a buyer’s market, you’ll have more opportunities to negotiate, and it’ll be easier for you to make the home of your dreams a reality.
3. Get pre-approved for a mortgage
If you want to buy a house, getting pre-approved for a mortgage is your best bet. If you’re pre-approved, it shows the bank that you have a steady income and a FICO score of 650 or more. This basically means they believe you’ll be able to pay them back if you get a loan.
This will give you far more negotiating power when it comes time to make an offer, and lessens the risk of the bank rejecting your offer. You may even qualify for an FHA mortgage if your FICO score is 580 or more, but this isn’t the case for all lenders, so check with yours before applying.
4. Make an offer that’s lower than the asking price
If you want to buy a house at the lowest price possible, make an offer that’s lower than the asking price. Remember, this isn’t a game of chicken, so make the offer reasonable. You should probably increase your budget by 5-10% when deciding how low to go.
5. Pay cash for the house of your dreams
If you have the funds, make an offer on a home using all cash. This will remove any haggling regarding money with the other party and give you more negotiating power. But of course, not everyone has the funds to make an offer like this, so beware!
6. Negotiate with the seller
When making an offer on the house, don’t be afraid to negotiate with the seller. Even if you’re pre-approved for a mortgage, and they aren’t, you can offer less than the asking price. Don’t worry about offending them: if they like your offer, they’ll accept it!
7. Time your purchase perfectly
When you’re buying a house, timing is everything. Buy in the winter when there are fewer people who want to sell their homes because if everyone is trying to sell at the same time, it can drive down prices.
Buy in the summer when there are more buyers out, but try to avoid a holiday or a weekend because more people are in the real estate business finalizing their purchases.
8. Use online resources to compare prices
If you’re looking to buy a house, use online resources like Zillow and Trulia. Enter the address of your preferred home into these sites to find the estimated value of the house, as well as what similar homes have recently sold for. Use this data to negotiate with your preferred seller.
9. Scout out new neighborhoods before buying
Before you sign any dotted lines, check out the neighborhood of your future home. Do some research online to find out if there’s anything you should know about the area. An excellent way to scout out a neighborhood is by asking your realtor for some photos and essential information on it.
10. Consider renting before you buy
Before buying a house, consider renting for six months to see if it’s something you like. If not, at least you can save money by avoiding costly loan payments! However, if you do love your home, consider investing in rent-to-own homes so you can take the time to build equity.
Now that you know all of these tips and tricks for finding the best deal on the house, you’re ready to start looking! Be sure to choose your realtor wisely, and never be afraid to negotiate. This way, you’re sure to end up with a great deal on a house you love!