What's the Cheapest Way to Buy a House? 8 Easy Options

The national median home value is $357,275,[1] but that doesn’t mean affordable homes are out of reach. The “cheapest” way to buy a house depends on how you define cheap, whether that’s the lowest purchase price, the smallest upfront cash investment, or the lowest long-term cost.

Some buyers save money by targeting overlooked or distressed homes. Others buy cheaper by choosing smaller homes, less competitive locations, or financing options that reduce upfront costs. And in many cases, the biggest savings come from combining strategies — like buying a fixer-upper with a low down payment loan.

Here are some of your options for the cheapest way to own a home.

1. Tap into your personal network

Some of the cheapest homes never hit the open market.

Let friends, family, coworkers, and neighbors know you’re looking to buy. You can also search for off-market opportunities on home-buying websites through platforms like Facebook Marketplace and Craigslist, where homeowners sometimes list properties without hiring an agent.

One of the most effective networking tools, though, is a local real estate agent. Agents often know about homes before they’re widely advertised — including sellers who may be open to a quick or below-market sale to avoid showings or repairs.

2. Target unwanted homes on the MLS

Once you connect with an agent, ask them to pull listings that have been sitting on the multiple listing service (MLS) longer than average. Homes that have been sitting on the MLS for 90 days or longer are often strong candidates for negotiation. Sellers may be more willing to accept a lower price after weeks or months without serious offers.

Long days on market can signal:

• Overpricing
• Needed repairs
• Unpopular layouts or locations

Not all of these are deal-breakers — but they can give you leverage. A knowledgeable agent can help you determine whether a stale listing is a hidden bargain or a money pit.

3. Look for foreclosures

Foreclosed homes are prime grounds for finding bargains.

These homes are sometimes neglected and could come with expensive problems. Some foreclosure websites for homes in good shape include:

• Free listing sites such as Zillow Foreclosure Center or Realtor Foreclosures
• Government foreclosure sites such as the HUD Homestore, HomePath.com, or HomeStep.com
• Subscription foreclosure sites such as Foreclosure.com or RealtyTrac

An experienced agent can help you evaluate foreclosed homes and determine if they're a good investment. If they have a strong network, they may also learn about new foreclosures before they're listed on the market, which means less competition for you.

» MORE: How to find the right foreclosure home

4. Consider short sales

A short sale occurs when a bank allows a homeowner to sell their mortgaged property for less than the amount still owed on the loan.

For example, if someone sells a home for $200,000 but still owes $250,000 on the mortgage, they're "falling short" by $50,000.

Banks typically want to make at least 85% of the home’s appraised value on the sale, though some will drop as low as 50%. Expect stiff resistance, slow processes, and lots of back-and-forth negotiations. Short sales are sold as is, too, with little or no room for repair requests or contingencies in your offer.

5. Buy a fixer-upper

Fixer-uppers are often among the cheapest homes available, but only if you understand what you’re taking on.

Homes needing cosmetic updates (paint, flooring, fixtures) are usually safer bets than homes with major structural issues. The lower purchase price can help you build equity quickly as you make improvements over time.

Before buying:

• Hire a professional inspector
• Get contractor estimates
• Build a repair budget with a buffer

Some buyers use renovation loans like the FHA 203(k), which allows you to roll repair costs and the purchase price into one mortgage, reducing upfront cash needs.

6. Hunt for distressed or vacant properties

Distressed properties are homes that have fallen into serious disrepair. Homeowners often can’t afford to make repairs, or they live somewhere else and have neglected the property. These homes aren't listed for sale, but the homeowners may be willing to sell cheaply just to get the property off their hands.

🔍 Here's how to find distressed properties:

• Drive for dollars: This involves targeting neighborhoods, looking for signs of neglect, and making an offer to homeowners. We recommend apps like DealMachine and PropStream that help find distressed properties without the driving.
• Find pre-foreclosures: Look for homes that have delinquent mortgage payments or are in the process of foreclosure.

7. Get a low down payment mortgage

If you can’t find a cheap home in your area, you could always finance through government loans to get a lower down payment. These mortgages could bring homeownership within your reach, but you might have a slightly higher monthly mortgage payment as a result.

Low down payment. The Federal Housing Administration (FHA), for example, offers mortgages to home buyers with just a 3.5% down payment. The low credit score requirement (580) and reasonable debt-to-income ratio (43%) also make FHA loans more accessible than conventional loans.

Zero down payment. Both the US Department of Agriculture (USDA) and Veterans Affairs (VA) offer no-down-payment mortgages for eligible home buyers. Veterans have to show a Certificate of Eligibility to apply, while home buyers in rural areas are eligible for USDA loans.

8. Apply for closing cost assistance

Buyers often pay 2–5% in closing costs. Even for a $200,000 home, that can cost $4,000–10,000.

Fortunately, first-time home buyers and low-income home buyers can apply for closing cost assistance from the government. This can come in the form of a grant or a second mortgage loan.

Check for closing cost assistance from your state’s government. On a federal level, the US Department of Housing and Urban Development (HUD) offers assistance through numerous programs, including:

• Good Neighbor Next Door: Deep discount on HUD-approved homes for public servants (teachers, firefighters, police officers, etc.)
• Housing Choice Voucher (HCV) Homeownership Program: Monthly housing payment assistance for families with low incomes

9. Expand your definition of "cheap"

Sometimes the cheapest house isn’t distressed; it’s just different.

You may find lower prices by:

• Buying near busy roads, commercial areas, or less popular neighborhoods
• Choosing a smaller or older home
• Considering condos or townhomes instead of single-family houses
• Exploring manufactured homes or rural properties

These options may trade space, privacy, or location for affordability — but they can dramatically lower both purchase price and ongoing costs.

The bottom line

The bottom line

The cheapest way to buy a house isn’t always about finding the lowest price — it’s about choosing the option that fits your finances, skills, and risk tolerance.

For some buyers, that means tackling a fixer-upper. For others, it means buying smaller, choosing a less competitive area, or using a low-down-payment loan to get into a home sooner.

If you’re unsure which strategy makes the most sense, a local real estate expert can help you compare your options and avoid “cheap” homes that turn out to be expensive mistakes.

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