Buying a home is often considered a sign of being in the middle class. Owning a house affords families the possibility of building wealth, not to mention memories for themselves and future generations.
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Thanks to a shortage of inventory, housing prices continue to increase. High interest rates only worsen the situation. Barbara Corcoran, a shark on ABC’s “Shark Tank,” recently spoke with Yahoo Finance to provide actionable tips to make buying a house more attainable that the middle class can use during their home search.
Target Homes That Have Been Sitting on the Market
Seeing a new listing is exciting. However, you’re likely not the only one looking at the new house. Corcoran advised avoiding the shiny new listing. “I would say the most important overall tip is always look where somebody else is not looking, and that’s always where you find your value,” Corcoran said.
Instead of visiting the new possibility, dig deeper to find a hidden gem. “Do your search based on houses that have been on the market nine months or longer. Those people are having second thoughts, thinking of taking a lower offer, ready to move, and that’s where you want to put your lower offer,” Corcoran said.
It takes some work, but it may reap a discount.
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Shop Off-Season
Spring and summer are commonly peak home shopping seasons. That increases competition, making it conducive for sellers.
“People don’t like to shop in the wintertime or Christmastime. They think it’s a bad time. It’s a great time to shop for houses because you’re not going to have any competition out there, and they are going to be more likely to take your bid,” Corcoran said.
If you’re not in a rush, waiting for the off-season may provide the chance to snag a home at a reduced price.
Don’t Be Scared Off by a Fixer-Upper
Purchasing a fixer-upper may not be glamorous, but the savings can be attractive. If you have the know-how, it pays to include fixer-uppers in your search.
“People don’t want to bother with [a fixer-upper] because it takes upfront cash, but you could always get a construction loan. [There’s] no problem getting construction loans today, and you could find a fixer-upper and add value yourself if you’re willing to just wait a few months to do it,” Corcoran said.
Look for Homes With a Second Entrance
An overlooked way to save on a home is to purchase a property with a second entrance. A basement or back-of-the-house entrance qualifies as a second entrance.
That matters because a second entrance may reduce insurance costs. “You could create a small unit in the basement or the back of the house where you can offset your insurance costs,” Corcoran said.
Before You Buy, Check Climate Risks
Homeowners insurance continues to rise in large part due to climate change, with premiums increasing more than 30% between 2020 and 2023, according to The Brookings Institution.
Purchasing a house in a high-risk area will bring increased premiums. “Right away you’re going to increase your insurance costs probably by close to 20%, [and] some instances 25%,” Corcoran said.
However, this also provides an opportunity. “The good side of it is a lot of people are afraid of it, and so sometimes if you’re not afraid and you want to take that risk, you can make a lower offer and … get a house you like accepted,” Corcoran said.
Buying a house is undoubtedly expensive. Thankfully, with a little ingenuity, you can buy a home for less to create memories in and build wealth.
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This article originally appeared on GOBankingRates.com: 5 Tips From Barbara Corcoran That Can Help the Middle Class Buy a House
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