Three Secrets To Working With A Low Budget In A Competitive Real Estate Market

Posted on: 21 June 2017

If you live in a really competitive real estate market, you know that finding a home can be like fighting in Sparta. If you have a low budget, you may find yourself at a major deficit when it comes to successfully bidding on a home. If you are having issues with finding a home in your area due to your budget being lower than the usual, there are some ways to make yourself a much more competitive or successful buyer. Here are three secrets to working with a low budget in a competitive real estate market.

Buy the land in cash, get a loan for building

If you break down the steps of owning a home, you may find that things are more simple. For instance, if you have a $100,000 downpayment saved and you are approved for a $300,000 mortgage, consider using the downpayment for land. Talk to your real estate agent about getting a home building loan, rather than a loan that would allow you to purchase a home currently. If you are qualified for a loan to build a home, instead use your downpayment to purchase land. Land, even in expensive areas, is much less expensive than purchasing a home. This will allow you to make cash offers on the land, then build a home that is completely within your budget. 

Make offers on homes that are not for sale

If there is a particular neighborhood that you have pinpointed as affordable and within the area that you love, you can make offers on these homes. Instead of making offers on homes that are on the market and getting into bidding wars, look for houses that are not on the market to make an offer on. If the neighborhood has had foreclosures, short sales, or other issues, there can be neighbors who are also looking to move but have not yet listed. If you make an offer on a home that is not for sale, you may find that the owners are actually receptive under the right terms, netting you a home without the bidding war. 

Offer extras

It is customary for buyers to ask for extras, such as a washer and dryer to be included or for the roof to be rebuilt. If you have less money than others on the market, you can offer the seller some extras. You can offer to foot the cost to uproot and replant trees and plants that the seller may want to take with them. You can also offer for the seller to take all of the appliances with them and purchase your own appliances. Offering money back in the form of concessions or the ability to keep valuable items, the sellers may be more interested in offering you the contract. 

Contact an agency, like RE/MAX PARADISE, for more help with your home.