The glut of homes repossessed during the housing market crash have mostly been reabsorbed into the system, leaving lots of new home buyers wondering how they’ll ever find a house they can afford. If you’re looking for a bargain in the housing market, don’t despair — there’s always a good deal to be found if you know what to look for. The best homes are those that don’t need a ton of work, but are priced to move because they’ve got something seriously wrong with them.
Some of those things are not issues you want to try to tackle on your own, but a lot of homes just simply don’t appeal to buyers — these are the ones to zone in on. Before you start looking for a bargain home, check with your lender to determine just what flaws your loan program will allow. For many borrowers, their new home must be habitable and functional, which limits their choices among cheaper homes.
If you’re looking for a house that will save you a bundle and won’t require a tear-down to turn into your dream home, look for these features as you’re shopping:
Location, Location, Location. It’s a concept as old as time itself — the best caves were the ones closest to the hunting grounds and water supply. That idea isn’t lost today, despite mass transit, supermarkets and indoor plumbing, although the things you’ll want to be near may be a little different.
Areas with good schools, few rental homes and similarly-sized houses are always good places to start. You don’t want to own the biggest house on the street, nor the smallest — both are hard sells down the line and difficult to accurately appraise. Instead, look for a house that would blend in nicely to the neighborhood, were it spruced up a bit.
A Little Curb Appeal. Most bargain houses have little to no curb appeal, so don’t expect to find a glimmering diamond while you’re shopping. Today, homes are sold by the images they present online long before a potential buyer walks through the door. When these homes are obstructed by overgrown landscaping, garbage piled knee deep or are just generally frumpy, people don’t come out in droves — and eventually the home gets discounted deeply.
When you visit one of these homes, don’t imagine what you’d do to change the face of it dramatically, instead see it with the bushes and trees cut down, the clutter removed and the paint touched up. If it has some great angles, an inviting porch or other special architectural features, go inside and look around. Don’t be tempted to buy an ugly house with the goal of eventually ripping the front off and rebuilding it. Despite what Better Homes and Gardens may tell you, that’s a huge, expensive project that rarely pays off — better to buy the right house the first time.
An Inviting Foyer. There are few things worse in a house than a poorly-designed foyer. Not only are these hard to correct without taking out walls, they just ruin the flow of a home. When you first set foot into your bargain homes, take a minute to notice your surroundings. Is the foyer dark, scary or otherwise uninviting? Does it feel like a cramped elevator? Or does the house have no foyer at all, instead dumping you right in the middle of a room?
All these problems can be corrected, for enough money, but if you’re looking for a bargain, you need to choose a home that won’t cost an arm and a leg to fix. A well-designed foyer with some natural light and decent elbow room is ideal — ignore the paint, lighting and flooring, those are cheap fixes in a space that small. Some homes don’t have foyers, and that’s OK, too, as long as the front door is in a spot that makes sense and doesn’t feel like it was an afterthought.
Surface-Deep Ugly. I used to tell my clients, especially those on a budget, that the best homes were the ugliest. Curling wallpaper, shag carpet, outdated light fixtures and dark or hideous paint will prove to be huge money savers if you can learn to look beyond them — most people can’t, causing these homes to sit and sit.
One of the best bargains I ever saw in the housing market was a house decked out in deep blue. From the carpet to the crushed velvet curtains, everything was blue, blue, blue — and what wasn’t, was clad in a deep walnut paneling. I showed this house a number of times because I knew it was a great place, but clients ran away from it. Although the blue carpet wasn’t my first choice, all the house really needed was some light-colored paint, new fixtures and a trash can for the curtains to be a whole new place.
Eventually, someone came along who could see its potential and scooped it up, but it took a surprisingly long time. These are the houses you want — the surface-deep ugly is easy to remove, sometimes all it takes is a few handy friends and a weekend to turn the most unappealing home into a really cute place. Hardwoods under ugly carpets are a huge bonus, they’re usually in amazing shape and all you have to do to find them is tear out one frighteningly awful carpet.
Large Rooms. Again, let me repeat, you don’t want to tear out walls — it’s a costly adventure — choose a house with rooms that are decently sized so you don’t have the urge. As your family grows, you’re going to wish your nursery was bigger than an oversized closet and the kitchen sat more than two. Think about these things now, before they become an issue and don’t waste time on houses with tiny rooms. They’ll always be harder to sell, leave you no space to make changes or add storage and feel much more closed down than homes with fewer, but bigger rooms.
A Well-Functioning Layout. There’s a thing that we talk about in the housing sector that we refer to as the “flow” of a home. That is, how well does the home function, how effortlessly can you move from one room to the next? A home with good flow puts all the things you care about within easy reach and creates more privacy in places you’d rather keep separate. The flow of a home is a subjective standard, to be sure, but some homes flow so poorly that no one can function in them.
A house that moves traffic easily from the living room to the kitchen and through the back door, places bathrooms in convenient spots for both occupants and guests and creates a private haven for the master bedroom is ideal. Whether you prefer that flow to be in the form of an open floor plan, where all the major living areas are in one large area, or compartmentalized, with rooms having specific tasks, is up to you, as long as the house makes sense.
Lightly Used Big Ticket Items. Sure, that roof, air conditioner or furnace may only be seven or eight years old when you’re looking at potential homes, but before you manage to outgrow your house, they’ll need replacing. Depending on your location (and the quality of materials, of course), an average roof will give you 15 to 20 years of service, an air conditioner 10 to 15 years and a furnace 15 to 25 years. Considering that these items cost thousands of dollars each to replace and often require specially licensed and/or trained installers, they’re massive expenses you don’t need right away.
I’m not saying you should avoid homes with aged equipment, sometimes it’s inevitable to get some of the other items you really need, like good schools or geography. However, if you have two homes that are similar and one has a new roof and a two year old furnace, jump on that one. Even if the roof is a weird color or the furnace isn’t your favorite brand, you’ve just been given extra time to replace them with something you do like.
A Kitchen With Potential. Your Realtor might have mentioned how the kitchen is one of the biggest selling points of any home — if they did, you know you’re going to see some doozies while you’re bargain hunting. There’s no room I’ve found in such complete and utter disarray, with such lack of planning and vision during remodels than the kitchen. Maybe there’s an island in a weird spot, the traffic flow simply dead ends or the stove is smashed against the dishwasher — the list of problems I’ve seen in kitchens is never ending.
If you’re looking for a bargain, you’re going to find trouble kitchens everywhere you go. The trick is to choose a home with a kitchen that can be remodeled on the cheap. Does the kitchen have a reasonable flow for cooking and serving meals? Are the appliances placed in a location that makes sense? Are there plenty of good, solid wood cabinets (even if they’re ugly, you can always refinish them)?
Ugly kitchens can be worked with — a new backsplash here, some new formica there and before you know it, the kitchen you bought is gone for good. When you look at the kitchen in your bargain home, make sure you’re not envisioning replacing whole banks of cabinets or moving electrical or plumbing — that’s when you start spending money. Taking down cabinets to open a kitchen up, repainting, refinishing and relighting, however, are cheap fixes. Old cabinets can be given a whole new lease on life with some new hardware, too!
Plenty of Juice. We’ve gotten so used to having electrical service to our homes and offices that we hardly give it a second thought when we’re house hunting — those outlets just kind of blend into the background as home after home is crossed off the list. Don’t overlook the electricity when you’re shopping for a bargain home because an undersized or completely inadequate electrical system is not a cheap fix. As you go through rooms, count the outlets, envision where you’ll put your furniture and where you’ll plug in your electronics. If there aren’t enough outlets within easy reach, you’ll end up regretting it later (trust me on this one).
Before you leave any homes that are potentially good matches, find the electrical box. Although fuses are still serviceable systems, they normally only have a 60 amp feed or smaller, making it hard to power everything a modern home needs — so toss these puppies out. Take a look at the master breaker (it’ll be the only one on the top of a double stack of breakers inside the box) — if it’s labeled smaller than 100 amps or the box is so old there isn’t one, keep walking.
I know you really liked that house, but unless you’re prepared to shell out thousands of dollars to update the electrical system and risk a denial on your FHA loan, it’s simply not worth it. Too many homes have been updated with modern electrical systems over the last thirty years or so — choose one of these and you’ll have enough power to last you a while.
A Sense of Identity. Once in a while, you’ll walk into a house and wonder what sort of madness happened inside. In one room, it’ll be decked out in Victorian garb and in another, it’ll look like the 1980s exploded inside…and the bathroom will be a lovely shade of 1950s pink. If you walk into a house and you can’t tell when it was built, or at least have some sense of how it fits into history, walk back out.
I know it seems like a silly thing, but a home with no sense of self is a home that will confuse and confound future buyers. You can certainly scrounge and scavenge to find parts that will restore the architectural features that your home should have had, but if you have to replace every door and every piece of trim to create a unified feel, you’re going to spend a bundle.
You don’t have to buy the first house you look at, and I’d recommend you keep shopping until you find one that feels special. When you finally find a house with a sense of self, you can take that foundation and update it without destroying its identity. The day you go to sell, your home will feel genuine if you kept your updates true to its architectural style and people will notice. A house that’s always been worked against will always feel chaotic — they’re a hard sell in any market.
Bottom Line: Ugly Homes are Cheap Homes
Normally, I’m about the last person on the planet to advocate judging anything by its looks, but when you’re shopping for a bargain home, looks matter. Ugly that’s only skin deep will pay big dividends down the line and you’ll have the pleasure of creating a magical transformation for a home that sorely needs it. Always be sure to take lots of “before” photos so you can remember just how far you’ve brought your home — that’s one of the most rewarding parts of buying an ugly house — and the equity that you’ll gain just by painting and fixing the place up, that’s a pretty big reward, too. 😉