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Home » Home Buying, Home Selling

I Could Buy my Old House for One-Third of the Price?

Last updated by on 9 Comments

A Lot can Change in the Housing Market in Two Years!

Two years ago I sold my previous home FSBO for $140K (that’s it in the picture and more pictures below). Just out of curiosity, I was looking at home prices on Zillow for my old neighborhood. To my surprise, I found a house right down the street that is an identical twin to my old house selling for a mere $49K!!

I couldn’t believe it. It is literally the same exact structure as my old house at almost one-third of the price. It looks like the house is a real estate owned (REO) property. This means that it went to foreclosure and was not sold at an auction. The bank took ownership of the property and is now trying to sell it at a fraction of its value.

house for saleGranted, it looks like this house is not quite as nice as my old house and needs a little TLC – but not THAT much TLC. With about a $15-20K investment, it would probably be in better shape than my house was. Then you’re still looking at about only half price.

What can you Take Away from this Example ?

1. Barring major structural damage, I am positive that it would be hard to lose money on this house. For $50K, I have never seen a house this nice. 3 bedrooms, 2 baths, 2 story home in a desirable neighborhood. I might even consider this as an investment opportunity. There are bargains to be had in the market right now. If there in my neck of the woods, they might be in yours too.

house for sale living room2. If you’ve been on the fence about buying a home and come across opportunities like this, why wait any longer? I can’t imagine prices getting much lower than this. And if lower, how much lower could they go? Many experts are now predicting that prices will bottom in the first half of 2010. But why wait until they rebound?

3. If you’re a first time home buyer and can take advantage of the first-time home buyer tax credit on an opportunity that is this cheap, it would be kind of crazy not to. In this example, it would equate to almost 20% of the purchase price. That’s enough for the entire down payment!

4. 30-year fixed mortgages are still near a historical low of 5%. It’s a great time to lock in a low interest long-term loan.

My Advice house for sale kitchenon Looking for Homes

I’m not telling you to go out and buy a house, but what I am telling you is that depending on the market that you live in, there may be some true bargains out there and it is a great time to look for them and ask yourself if prices could get much lower and the timing better than this.

Home Buying Discussion:

  • Have you bought a house recently?
  • Are you considering buying a house?
  • Has the 1st-time home buyer credit given you incentive to buy?

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About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


9 Comments »
  • Jason Unger says:

    We bought a house in March — our first home — partially because of the incentives (cheaper prices, lower interest rate, $8,000 credit) but mostly because we needed the space.

    We wouldn’t have bought a house just for the financial reasons — we bought because we had our first child and needed to get out of our apartment.

    It’s been worth it — we got a great place at a great price, so it worked out.

  • G.E. Miller says:

    @ David – Good point. Thank you for clarifying.
    @ Jason – Sounds like everything worked out perfectly for you. Congrats!

  • Raif says:

    Where do you live that you can buy a house for 50K?

  • Broke MBA says:

    That is amazing. Glad you aren’t trying to sell today. Competing with the foreclosure down the street would be a nightmare!

    My wife and I are currently under contract for our first home. While the tax incentive is nice, it really had little to do with our timing or decision to purchase. Since our lease is up in December, the tax incentive basically encouraged us to close a month earlier than we would have originally.

  • Elaine Smith says:

    In which area of the US is this house being sold?

  • Shaun McGowan says:

    I recently bought a house, in Australia we get State and Federal grants as a first home buyer, during the GFC this was increased to promote and stimulate the economy. Our grants just get eaten up in Stamp Duty, it’s a crock!

  • Natalie says:

    I found a REO property in Las Vegas across the street from where I used to live. I bought it for $53,000 and put 20% down. I now have a very cheap place to live for the next 20+ years. If we hadn’t bought this property, I would still have to be working instead of staying home with my newborn. The house I was renting before was $1300 a month and now my total house payment including HOA is less than $500/mo. I only had to do about $1000 of repairs to make it livable. I say go for it if you can!

  • chantel says:

    There are several nice homes for sale where I live in central florida for under $75K, most of which have pools and over 1400 sq. ft.and 3bed/2/bath/2car garages.

    The shame for me is that my husband and I made mistakes with our credit (which we are working on) and have a lot of student loans that make it hard to purchase right now. of course we have NO savings because all of that money goes towards debt (if you have debt and want to pay it off, you cant have savings)… By the end of 2011 we’ll be able to purchase (no debt, and have about $5K in savings) as long as the local bank keeps the community hero program in place (I work in a hospital and this bank allows for 100% financing and 0% down as long as savings show $5-6K for hospital workers).

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