How to Buy Your Dream Home for Less

April 21, 2009 by  
Filed under Save Money

Perhaps the most positive aspect of the recent downturn in the national economy is the accompanying decline in the housing market. This means that if you’re one of the lucky ones that still has a job, maintained a good credit score and have saved a sufficient down payment, now may be the best time to buy that home you’ve been dreaming of.

In a declining housing market, foreclosures and REO listings make it quite easy to save money and buy a home at a discount. However, you’ll need to be prepared to spend more time researching and doing your homework.

Even if you aren’t looking at foreclosures or distressed properties, you can expect to save money on even the nicest homes at 15 to 20 percent below former market value. This means that not only do you save money on your down payment, closing costs and future mortgage payments, you’ll have instant equity and enjoy watching the value of it grow after the housing market rebounds in the near future.

When looking at homes, try to pick a few out that are definite possibilities, and then wait. If you want to save the most money possible, homes that are on the market 6 months or more will be more likely to sell at a much lower price.

There’s no point in not asking, even if you can afford the full listing price. Any offer that is immediately accepted means that it was too high, and you probably could have purchased it with fewer of your hard-earned dollars.

You may also choose to search the Internet for homes that have been on the market for several weeks and months before choosing the ones to schedule showings at. These homes are usually priced too high; you’ll notice that many will continue to drop 10, 20, even 30 percent more after so much time has passed.

Remember that due to the current housing market environment, you may find yourself placing an offer on a home that is located in a currently distressed area. Most of these are due to an increasing number of foreclosures and empty homes in the area. Over time, however, these will be sold to new owners and the past state of the neighborhood should recur in a few years’ time.

This is a great way to save money on any repairs needed on the home as well; take your time and perform the work you can on your own, or by recruiting friends and family.

When you tour the homes you’re interested in, take note of every small cosmetic defect or repair that needs to be performed. These are viable negotiation points when finalizing your agreement, and will make a lower offer seem more reasonable when faced with these items.

Try to get the seller to pay for more closing costs to save as much money as possible – it never hurts to ask! Any commissions, inspections, title insurance and other expenses are all negotiable and can help you save big!