Recommendations to Help You Stay within a Tight Home-buying Budget

Posted on: 26 May 2020

The purchase of a home is a large purchase and an important investment, which you need to prepare for financially and plan for a budget to make it successful. However, when you plan your budget for the home-buying process, you don't need to make your finances tight with the new responsibility of homeownership and its related costs. Here are some recommendations to help you stay within budget with your upcoming home purchase.

Consider a Townhouse or Condominium

When the home prices in your area are ever-increasing, it can be difficult to find an affordable traditional single-family home with a yard. However, there are many types and styles of homes available in every market, you just need to know where to look and adjust your search criteria to locate some that will suit your needs and budget.

Townhomes and condominiums are a great way to buy an affordable home and start building your home equity. Because townhomes and condos have shared walls and often shared outdoor areas, they can come at a lower price than a single-family detached property. Talk to your realtor about this idea to look into areas that have this type of more affordable housing.

Look at Distressed Properties

A second option to help you with your home-buying budget is to look at homes that are distressed physically or financially and, as a result, are priced a bit lower than similar homes that are in move-in ready condition. When you don't need to or want to pay for the premium price of a sparkling new and updated home, you can buy a fixer-upper and work your way into building equity with the property. 

A property can be physically distressed and need cosmetic work, but it may also be financially distressing, meaning the seller is in a situation in which they need to offload the property quickly. This will usually allow them to price the home a bit lower. Sometimes the home may be in foreclosure, about to be in foreclosure, or be a bank-owned home.

Keep in mind that if a property you are considering purchasing is bank-owned or tied up in the foreclosure process, the negotiation and escrow process can take a bit longer but it is well worth the wait when you get a home at a great deal and have instant equity in the home. Talk to a real estate agent about this option as a way to find your next home. They will have the access and knowledge to navigate bank websites and submit offers on a foreclosed property to make this type of purchase a reality.