You can buy a cheap house in a number of ways. Here is one of the easiest ways to do it, but will it work for you?
Making a low offer is one of the best ways to buy a cheap house. This is a basic trick used in real estate deals and many other kinds of negotiations. It is sometimes called a "lowball offer." Everyone knows how to do it, but most of them are afraid to. It can be a waste of time and embarrassing if you don't do it right, but it can also get you a cheap house.
"If you're not embarrassed by your offer, it's not low enough," a very successful real estate investor once told me. He has made a lot of money in real estate, so I think it would be smart to listen to him. But you should know that most of the time, a really low offer won't be accepted.
It will almost never be accepted, to be honest. Does this mean it's pointless? In no way! There will often be counter-offers, and a low initial offer is just a way to change expectations.
If you lower your expectations, you can buy a cheap house.
When I was trying to sell my car, a really nice man came to look at it. After getting under and inside the car, he was polite and gave me half of what I asked for. He also gave me his phone number (I said no). I was curious about what was wrong with the car and hoped I could get a little more than half price. My expectations were quickly changed. Lucky for me, someone else told me the full asking price before I picked up the phone.
So, the point of a low offer is to change what people expect. If the seller wants $200,000 and you offer $160,000, will he take it? No. Almost certainly, he'll say no. It won't be as easy as that to buy a cheap house.
But he could make a counter-offer. Now, let's say you go back and forth and agree to $182,000 in the end. He wouldn't have thought about going this low before, but after starting at $160,000, it seems like a win to him now.
What's wrong? This way, you'll miss out on a lot of possible homes. Some sellers won't even take your next offer seriously if your first offer was too high. So, this is a way to find a home when you have time and really want to get the best deal possible.
In California, one investor would often make dozens of offers at once on houses. He didn't even look at them. Instead, he wrote offers that were 25% less than what they were asking (he did include an inspection contingency to protect himself). Most, but not all, of the sellers said no. He got great deals this way over and over again. That's one way to get a house for less money.
