4 Problems I've Run Into When Buying a Home -- and How I Overcame Them

I have bought a home several times over the years. And, when I've purchased properties, I've run into a variety of different issues that have caused problems with the purchase transaction. In fact, here are four problems I've had when searching for a house -- along with some details on how I overcame the issues.

1. A lack of properties on the market that I'm interested in

In June 2023, there were around 26% fewer newly listed houses on the market than in June 2022, according to data from Realtor.com. Housing inventory is low because people don't want to sell and give up their low mortgage rates now that rates are a lot higher.

Because there aren't as many properties being listed, I had a really hard time finding a home. To overcome this issue, I looked beyond the MLS listings of houses for sale. I found a house that was for rent that needed a lot of work, which renters didn't seem to be gravitating toward, and I approached the owners and asked if they would sell it to me.

Thinking outside of the box this way can be helpful at a time when there's no properties you're interested in on the market. You may also want to expand your search parameters if you can, such as by looking in a wider geographic area or opening up to buying a fixer-upper even if you planned on finding a finished home.

2. Homes that were out of my budget

In the past, I've had a hard time finding houses within the budget I had set for myself -- especially when home values were pretty high. I've taken a few different approaches in this situation -- none of which involved spending more than I should.

When I was finding homes in my desired area were too expensive, I opted to buy one that needed remodeling. Since I was able to pay a lower initial purchase price and pay for the upgrades over time, I ended up being able to get a house in my desired location.

I've also dealt with this issue by scaling down my list of necessities. I focused primarily on location and other factors I couldn't change, like commuting time, and gave up some "nice-to-haves," like a large kitchen.

If you are also finding houses aren't affordable for you, you could try these tactics. Or you could wait and save more so you can afford a costlier home without risking your future financial security.

3. An appraisal that came in too low

One big issue I've run into is an appraisal that is too low. See, mortgage lenders typically won't loan you more than a certain percentage of the market value of the home. I try to keep my loan-to-value ratio below 80% so I can avoid private mortgage insurance, which means I won't borrow more than 80% of what the home is worth.

The issue, though, is that the bank determines what a home is worth based on the appraisal, not based on what you're paying for it. And, in the past, I have had situations where a house appraised for less than the amount I had offered -- which adversely impacts the loan to value ratio.

To give a simple example, say you're buying a property for $100,000 and putting down $20,000. You'd have an 80% loan-to-value ratio -- but if the house only appraised for $90,000, you'd still have to borrow $80,000 to be able to afford the $100,000 price after making your $20,000 down payment. So, the low appraisal would mean your loan-to-value ratio was now 88%.

When this happened to me, in one instance I was able to get the sellers to reduce the price based on the low appraisal since other borrowers were likely to run into the same issue. In another situation, though, I actually ended up switching lenders. My new lender ordered a new appraisal, the property appraised higher, and I was able to move forward with the transaction as planned.

You could attempt these techniques as well, or could put more money down and move forward even with a lower than expected appraisal.

4. Sellers who are unwilling to make repairs after problem inspections

Finally, the last problem I ran into was sellers who were not willing to make repairs after a problem with a home inspection. When this happened, I actually ended up walking away from the sale and finding a better home.

If major repairs need to be done and the seller won't be reasonable, you may want to take this approach too, unless you're getting a good enough deal that you can fund the repairs out of pocket and still incur reasonable total costs for the home purchase.

The reality is, it is inevitable that you'll have some problems in your search for a home. But if you can handle them with a level head and look into all your options for solving them, you can overcome them and maybe end up in the home of your dreams.