Buy Real Estate Without Breaking Your Budget

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f you want to buy a home,       time buyer programs might help
but aren’t sure if your         you afford more funding. Many
budget can handle soaring       lenders are now offering
real estate prices, we’ve got         interest-only home mortgages;
good news. There are things you       just make sure you thoroughly
can do to stretch your buying         evaluate the terms for this type
power. With the help of your real     of home loan. Down payment grants
estate agent – and these 10 tips      are also available in some
– you can become a savvy home         instances and might be worth
buyer without breaking your           investigating or discussing with
budget.                               your realtor.

1. Get pre-approved for your home     3. Sell your existing home first.
loan. This means, fill out a loan     Although selling your existing
application and go through the        home before finding new real
process of securing financing.        estate to buy can be a little
That way, when you’re ready to        nerve wracking, any inconvenience
seriously evaluate real estate,       will be offset by your ability to
you’ll know exactly how much home     make an offer with cash in hand.
you can afford. And you can prove     Contingent purchases are not the
to a seller that your offer is        best when negotiating to buy a
sincere.                              home. Having your financing in
                                      order and your bags packed will
2. Explore creative financing         give you the advantage in a
options. During the home loan         competitive market.
pre-approval process, ask about
ways to get creative with your        4. Look for vacant real estate.
financing. Low down payment           Perhaps a seller’s job has
options, first and second             transferred him out of the area.
mortgage combinations and first       Or maybe a family purchased a new

home before putting their             western exposure. In time you’ll
existing one on the market. In        need to gut the existing home and
any case, a vacant home could be      build from the ground up or
just the deal for a savvy home        contract significant home
buyer, so have your realtor look      improvements. But in the end your
for vacant property in your           property value will skyrocket.
preferred neighborhoods. And keep     And if your carpentry and other
in mind, the longer a house stays     construction skills are
empty, the greater your               well-developed, you can save even
negotiating power will be.            more and accrue “sweat equity”
                                      during your remodel by doing much
5. Consider cosmetic fixers. If       of the work yourself.
you’re handy with a paintbrush, a
toolset and gardening equipment,      7. Don’t discount bank
consider buying real estate in        foreclosures. One person’s loss
need of cosmetic fixing. Property     could be your gain if you buy
that lacks curb appeal needs          real estate in foreclosure.
minor handiwork or the yard           Although the search for a decent
overhauled could end up being the     foreclosure may take a while,
home of your dreams for a price       your realtor should be able help.
you can afford. You just need to      The U.S. Department of Housing
look beyond the ho-hum to see the     and Urban Development
potential of a cosmetic fixer.        (http://www.hud.gov/) can be an
                                      excellent resource for foreclosed
6. Buy a home that’s a major          properties. Because HUD houses
remodel project. If you want to       are sold at market value, your
live on Lake Washington, but          best bet will be homes that need
can’t afford a $2M home mortgage,     cosmetic work or even major
consider buying a dilapidated         repair.
cottage on a fabulous lot with

8. Land with a manufactured home.     best neighborhood. You have your
Sometimes, to buy a home on a         heart set on a specific – and
budget, you need to look beyond       expensive – neighborhood. Maybe
convention. Even if your wish is      it’s the schools that you’re
to buy real estate, you may have      interested in. Or perhaps it’s
to settle for a piece of property     the close proximity to downtown
in an outlying area with a mobile     or the waterfront. In any case, a
or manufactured home. Discuss         budget-savvy buyer will look for
this option with your real estate     the least expensive home for sale
agent and try to keep an open         in the neighborhood. If you’re
mind about this possibility.          not in a hurry, you can even play
                                      the waiting game to see what
9. An older, smaller home. Older      properties come on the market.
homes are typically priced much       Your real estate agent can be a
less than newer construction and      real asset in this case by
don’t tend to create buyer            investigating potential sellers.
bidding wars. If you can enjoy
life in an older and smaller home     Buying real estate without
in a neighborhood or suburb off       breaking your budget will require
the beaten path, this could be        research and compromise. On
your ticket to real estate            moving day, however, you’ll have
ownership.                            the satisfaction of knowing that
                                      your homework paid off!
10. The cheapest house in the

About the Author:

Alex Peterson writes for ZipRealty. ZipRealty provides home buyers and sellers with an innovative solution. ZipRealty has streamlined the real estate process and is able to pass significant savings to its clients.