5 Hacks to Find the Most Affordable Homes in Your State

I was a Realtor for a decade, and I spent a lot of that time helping people get into their first homes. Although the market is a lot different today, the psychology of buyers and sellers is still fundamentally the same.

Here are my top tips for finding the most affordable homes in your state.

1. Know what you want

This sounds like the antithesis of what you should be doing if you're looking for cheap. But cheap is subjective, and what you want and need is very different from what the next person wants and needs.

If you decide what it is you want and need from a home before you ever start shopping, you won't hesitate when you do find that absolute cherry bargain. Hesitation is how you lose a cheap house in today's market.

If you really don't know what you want, spend some time online looking at home listings within your price range. You'll find all sorts of styles and amenities and will be able to make lists based on must-haves, nice-to-haves, and absolute must-not-haves. For example, I absolutely must have a decent-sized yard, but must not have a second story.

2. Look for homes that have been on the market a while

What "a while" means will vary based on your own market, but if most houses sell in 30 days and you start looking at homes that have been on the market for 60 days, those owners may be ready to make a deal. Although it's generally still considered a seller's market almost everywhere, that doesn't mean every house has a lot of demand.

Before you start shopping, though, and especially before you make a low offer, get a pre-approval letter from your favorite mortgage lender. Otherwise, your offer won't carry the weight you need to pull this move off.

3. Be open to a little sweat equity

Reread that header before you continue -- that says "a little sweat equity," not "buy a tear-down." There are so many homes on the market that have been inherited or otherwise belong to someone who has chosen not to update them recently.

This isn't always bad -- that fridge in Aunt Martha's kitchen from 1980 will literally outlive you and your grandchildren. But it does make people who have a certain idea about what they want to buy think twice, and it can reduce the asking price of a home due to the seller's anxiety about finding a buyer at all.

There's nothing wrong with liking that groovy 1970s vibe. Keep the house the way you found it, if you want -- heck, I'm restoring a 1950s model to its original glory. But keep in mind that these homes are sometimes still looked at as homes that "need work," and that works in your favor as a buyer.

4. Expand your neighborhood preferences

There are a lot of people who get attached to a neighborhood or a town when one just a few miles away will offer just as much culture, nightlife, education, or whatever it is that they're looking for. It's funny how sometimes a neighborhood just hits, making everything there intensely expensive, when another similar neighborhood sometimes just blocks away can't seem to get the same level of interest.

If you have a car or live in a city with decent mass transit, being a couple of extra miles from work or your favorite gym is nothing if you can save substantially on your mortgage, especially now that mortgage rates are sticking in the high 6% to 7% range.

5. Consider a duplex

On the surface, this sounds expensive. A duplex? That's going to cost even more than just one house! But you forget that a duplex is also a money-making machine if you buy it properly.

If you can find a duplex, triplex, or quadplex that could use some updating or is in a less-desirable neighborhood than the one you had originally wanted, you can use either an FHA loan or some first-time home buyer programs to help you get into it, and then use the money from the other tenant to reduce your overall housing costs.

This will mean you'll have to be a landlord, which can require dealing with tenants and randomly broken water heaters at 3 a.m. But if you go in with this in mind, it can represent significant long-term savings. Remember, long-term is the key.

Finding the most affordable home in your state is simple

It's not that hard to find affordable homes in your state; the tricky part is being the first one there, or at least the one whose offer is accepted by the seller.

But if you focus on those ugly houses with easily fixable problems (including by simply loving them for what they are as time capsules), homes that aren't necessarily in the hottest neighborhoods, or even multi-family housing, you can save a ton on your mortgage every month for years or decades to come.