How to pay cash for a house.
How I did it: I always wanted to own my home outright. I've owned 3 homes, all with mortgages, in the past, but since I've been divorced(10 years ago) I never seemed able to get the money together for a down payment on anything, forget buying outright! I was caught up in the ratrace, for sure, but I always dreamed of trying to own a house without a mrotgage. About 3 years ago I was diagnosed with an incurable cancer and I ran out of money within 6 months of beginning treatments. I began selling all of my belongings on ebay, amazon and craigslist, and we began really NOT spending money on ANYTHING unneccessary- and I mean this! We also budgeted our meals down to CHEAP- I began making beans from dried, homemade bread all of the time, and in general everything from scratch. And, we cut down on animal consumption and things like pretzels and other readymade snacks.We made popcorn a lot, and homemade potato chips in the oven, things like that. We carried our own snacks and drinks with us if we went out, too.I bought discounted movie tickets on ebay a few times, and my daughter used them when she went to the movies with her friends. If we saw something on sale at the grocers, we stocked up and we ate whatever was cheapest at the stores. We stopped buying excess stuff, no clothes unless we really needed it, and then we hit the thrift shops.I became a fan of ebay and Payless for new shoes. I have tumors that are open on my body, and I stopped buying bandages about a year and a half ago, we use washcloths for bandages, and we wash them in bleach and borax. If I saw something really cheap at a store I bought all of it and put it on ebay. For instance- I needed a popcorn popper and I searched for months for an airpopper on the cheap. I found one at ValueCity for 10 bucks- I bought all 8 that they had in the store and sold 7 on ebay- I made between 7 and 15 dollars on each one. I did that for mugs from Marshall's, bras from TJMaxx, you name it, if I saw it as a deal, I bought it and put up an auction for it. Anything that didn't sell, I return for a refund. I also bought stuff at the local thrift shop and sold it on ebay. I only buy something if it's less than 5 dollars, and I put things up with a 9.99 start price, sometimes I make a few hundred, sometimes I don't sell the item and I give it away. I also bought tons of books at the library's annual booksale(I bought 500 books for $100 the first time I did this- and I sold 2 of those books for over a hundred bucks each!) and sold them on amazon. OK, I have very little monthly income aside from my internet sales, I'm getting 750 a month in disability- so we're living in a hovel for 2 years and I'm living like a pauper- we even kept the heat off unless it was really cold, and turned it on to 60, no higher, EVER! AND, last summer and this we used fans all of the time and turned on the air conditioner only when we had guests. I dumped cable years ago, but I also dumped Netflix last year, we use the internet for entertainment- we never eat or drink out, I even drive a few miles to another town to get the bus to the hospital every week because I save 13 dollars that way! After 22 months I saved up $26k.My plan is to buy a beat up rural house with a few acres of land for $100k in 5 years, but my daughter and I always kept looking online at realtor.com and other sites for 'deals'- you never know!
A month ago we saw a cute little house on offer from a bank, about 100 miles south of us, no land, but for 28k! We didn't even really think about it, we drove down the next day, checked out the cute house(it's the SMALLEST house in the BEST part of a little depressed town) and we made an offer of 26k cash and the bank took it! We charged the lawyer and inspections, and by the time we got to the closing we had sold another 1k in stuff(we gave it a big push!) online, and we paid cash for the closing! Now, we are charging about $5k on updates and moving our stuff down there- we're in the middle of packing now- and I feel SO relieved to be moving into this tiny house- mortgage free! I'm still going to continue my frugal ways, we could turn our house over for at least 75k anytime, and I hope to save up enough money to get us to that dream property in the next 5 years. For now, I achieved the primary part of my goal, to live mortgage and rent free. I'm not living above my means. We don't have a fancy place, but it's a historic home and very nice- even if it is TINY, and it's near 2 community colleges and a state university for my daughter, there's a good number of artists around(she's an artist)and we are going to be able to continue to save. And if I can do it, anyone can.
Lessons & tips: Stop shopping for extras
1)Sell your excess on ebay, craigslist and amazon.
If you make any kind of craft at all, sell it on etsy, too.
2)Every time you need to buy something, really really hunt for the best deal- and consider used items, freecycle, ebay, craigslist, garage sales, thrift shops, discount stores and the internet are great sources!
3) Learn to cook from scratch! It isn't time consuming or difficult- you just learn a few basic recipes and make them.
4)Dried beans are versatile and cheap.
5)Do you really need that Coach wallet or a set of Lalique wine glasses? I sold my less favored designer items and replaced them with just as cute thrift shop and bargain items- no name, or vintage- a great deal! In fact, now I sell vintage glass online, because I learned a lot about it while I was replacing my own designer kitchen supplies!
6) Be open minded about what kind of home you will be willing to live in first. If you buy a house that is a real bargain, you can always live in it and continue to save until you make enough for your 'dream' property- any property owned outright is better than renting, if the taxes and insurance are a lot lower than rent.
I started without credit card debt or a car payment, and if you have debt, you should pay it all off ASAP! THEN begin saving for that property.
7) If a great deal comes along and you're not quite there(we were short the fixup money)- if you're close, take the plunge! We got a 7.25 rate on the credit card and I plan to pay back the 5k in 10 months- not too bad when you compare that to a mortgage!
Resources: Ebay.com
Etsy.com
Craigslist.com
Amazon.com
Freecycle.org
Realtor.com
Fatwallet.com
auctionzip.com
