Buying a home for your family can stretch your budget to new levels with the new expenses that come with home ownership. With a home you have to pay for the mortgage, property taxes, homeowner's insurance, and cover any repairs and maintenance of your home's components. Here are some tips to help you find and buy a home that is a little easier on your budget, but still allows you to benefit from all the tax breaks and establishing roots for your family by being a homeowner.
Look for Distressed Properties
When you search only for properties that are distress, or in poor physical condition, you have an opportunity to find and buy a home at a discount. A home that needs exterior and interior work will not be as attractive to many buyers, especially if it needs work and will not sell for a premium in most markets. Some buyers don't want to have to manage completing repairs or hiring someone to do the work and they want a home that is move-in ready. This allows you the opportunity to buy the home for less than its value and complete the repairs yourself.
A home that is financially distressed can also be an option when the seller is in a financial bind and needs to liquidate or sell their home as soon as possible. This scenario can result from a job loss or loss of family income, or an illness. When this occurs, the seller will want to sell the home quickly for as much as they can before they fall behind on payments and the bank takes the home back in foreclosure. In such a case of foreclosure they would lose all equity they have built up in the home.
Talk to your realtor for help in negotiating an offer on a distressed home. You may want to include repair estimates of the property to backup your offer price.
Ask for Seller Assistance
Another way to help you buy a home on a tight budget is to get additional financial help from the seller. This can come in the form of the seller paying for a portion of entirety of your closing costs for the purchase.
Closing costs can add up to several thousand dollars and pay for items, such as title insurance, recording fees, loan origination fees, and prepaid interest on your loan. A home seller may be willing to pay for these in order for the sale to take place, and they usually pay it out of their home sale proceeds.
Talk with your home realtor agent so you can include this type of request in your offer to purchase a home. It is necessary for it to be included in the initial offer and accepted by the seller for it to be a legal binding agreement.