Buying a home can be one of the most exciting and terrifying experiences of a lifetime. It can be thrilling trying to find your dream home but stressful when all you can afford are wrecks.
Purchasing a home you hate isn’t the solution. Neither is buying beyond your means and living in debt. Fortunately, there are some simple things you can do to find a supply of homes in your price range.
- Write Down Your Housing Wants and Needs
The key to finding an affordable home is to re-prioritize your list of demands. Write down everything that you can visualize in your dream home, from a finished basement to a gourmet kitchen. Then go through the list and separate the wants from the needs.
Your needs are those features which are essential to your daily life. You might need a minimum of two washrooms to accommodate you and your teenage daughter, or you might need a four-bedroom home with space for a large family. Your search requirements for a home should be your list of needs, since you cannot compromise on these essential features.
Your wants are those bonus features that you have always wished for in a home. Wants can vary from a pool to a spa like bathroom to an enormous walk-in closet. These things may make life more enjoyable, but they are not essential to your everyday life.
Overspending on a house just to attain a few of your wants can lead to years of financial difficulties. An affordable mortgage is more important than any want on your list. Before you reject a house because it doesn’t meet some of your criteria, ask yourself if it meets all of your needs. You might find dozens of homes out there that do.
- Consider Up and Coming Areas for Better Home Value
Expanding your search area and compromising on location may lead to a choice of affordable homes. Areas that are close to highways, transportation and amenities are in high demand, and homes here will always be overpriced. The further a home is from these conveniences, the lower the price. By expanding your search area outside the high demand areas, you will find a home that suits your budget.
Also, consider searching in transition neighborhoods. These developing areas lack the infrastructure and amenities of established areas, so prices are often much more affordable.
New construction often signals a neighborhood where house prices will start to rise – look for new schools, shopping centers and offices. Buying a home in these areas before house prices start to rise is a wise investment; once purchased, your home value will increase with each new service built in your neighborhood.
- Still Can’t Find What You Are Looking For In A Home?
If every house on the market is beyond your budget, it may be best to put your home search on hold. Well-priced homes are among the first houses to sell, so you need to allow time for more deals to come onto the market. Meanwhile, continue to do your research.
Search MLS (Multiple Listing Service) and the real estate listings in the local paper, and consult with your real estate agent. You should be looking for trends. If, on average, house prices are decreasing, then waiting a few months may bring a majority of homes into your ideal price range. If prices are increasing, you need to start searching aggressively. That means viewing every property within your budget.
While you wait, continue to save money for the down payment. The larger your down payment, the higher your budget and the more homes you can afford.
But remember when you see that home that works, snatch it up! Chances are if you like it today, someone might of looked it at it yesterday and just submitted that offer. Good homes still move no matter the market.
- This Isn’t Your Final Home. Be Willing to Start Small.
It is easy to get discouraged when searching for a home on a budget. Visions of dream homes are soon replaced by the reality of small and dated houses. But you are buying not just a home, but an investment. When money becomes available, you can upgrade your home and turn it into your very own dream home, all the while increasing the potential return on your investment. View these small and dated homes as a stepping stone to your very own dream home, and you will find a property you can both love and afford.