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

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By Clever Real Estate Updated April 11, 2024


For many home buyers, finding a cheap home may seem like a thing of the past. With the supply of houses still low in multiple markets, buyers might feel lucky finding a home that isn’t under contract, let alone selling below the national median home value of $354,179.

But affordable houses are out there. Below, we’ll break down your options for the cheapest way to own a home so you can find a bargain in your market.

  1. Networking
  2. Unwanted homes on the MLS
  3. Foreclosures
  4. Short sales
  5. Fixer-uppers
  6. Distressed or vacant properties
  7. Low down payment mortgages
  8. Closing cost assistance

Tap into your personal network

Use your local networks and friend connections to see if there’s a cheap home selling right under your nose.

This could mean using home buying websites, including Facebook Marketplace and Craigslist, to search for homes that are "for sale by owner."

On a more advanced level, this could mean connecting with a local real estate agent. Agents have their own extensive networks — including other agents and brokers — that would expand your search beyond your own reach.

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Target unwanted homes on the MLS

Once you connect with an agent, ask them to pull listings that have been sitting on the MLS (multiple listings service) longer than average. When a home has been listed for some time, the homeowner may be highly motivated to sell and thus more willing to negotiate a lower price.

Of course, you’ll want to investigate why the home hasn’t sold. Sometimes it’s because the home was priced too high from the beginning and didn’t attract enough buyers right away. Other times, the home isn’t in a desirable location, needs work — or has simply been on the market too long and made buyers suspicious.

Look for foreclosures

Foreclosed homes are prime grounds for finding bargains.

These homes are sometimes neglected and could come with expensive problems. Some sources of foreclosures in good shape include:

  • Free listing sites such as Zillow Foreclosure Center or Realtor Foreclosures
  • Government foreclosures 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.

» TRY CLEVER: Match with top local agents and start house hunting today!

Consider short sales

A short sale is when a bank allows a homeowner to sell their mortgaged property for an amount that’s lower than what’s 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 room for repair requests or contingencies in your offer.

Buy a fixer-upper

A fixer-upper is a home that’s structurally sound but in need of minor repairs. These homes require work over time, but they sell cheap.

If you’re handy and willing to put in the time to renovate a home, a fixer-upper will give you two major benefits:

  • Spread out the cost of homeownership. You pay a lower cost to buy the home, then repair it slowly as your budget allows.
  • Build equity fast. The more renovations you complete, the more value you add to the home.

Don’t assume it will be easy, however. You should hire an inspector before you buy the home, just so you know the level of repairs required. Some government programs can give you funding for the repairs, such as the FHA 203(k) mortgage, which allows you to roll repair costs and the purchase price into one loan.

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 are not listed for sale but the homeowners may be willing to sell cheaply just to get the property off their hands.

🔍 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 with delinquent mortgage payments, or in the process of foreclosure.

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 makes this mortgage more accessible than conventional loans.

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

Apply for closing cost assistance

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

Fortunately, first-time 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 U.S. Department of Housing and Urban Development (HUD) offers assistance through numerous programs, including:


How much money should you save to buy a house?

You'll need to save up for a down payment (3.5–20% of the home value), earnest money deposit (1–3%), and closing costs (3–5%). Since your costs are all based on a percentage of the home value, you can base your savings goal on the price range you're shopping for.

Can you buy a house with no money?

If you live in a rural area or you're a veteran, you may qualify for a no-down payment mortgage with a VA loan or a USDA loan. Buyers who don't meet those loan requirements can use down payment assistance.

Authors & Editorial History

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