Determine how much you are willing to spend, and how much of a discount is acceptable. For example, decide if a 20 percent discount off the list price is a victory, or whether you will max out at a $100,000 price.;
, Avoiding a mortgage will allow you to save a fortune when buying a house. In 2011, the National Association of Realtors reported that 30 percent of homebuyers were paying in cash to save money and avoid years of interest payments.


Calculate your savings to understand the discount you are actually getting. You will be giving up an annual deduction on mortgage interest, but if you are paying 4 to 6 percent interest on a loan of several thousand dollars over a 30 year period, you will end up spending more in interest than on your house.
Get a discount off the purchase price and closing costs. Negotiate a lower price in exchange for paying in cash and save on all the closing fees that mortgage lenders insist on, such as attorneys, title insurance, application fees and loan origination costs.
 On average, houses in foreclosure sell for about 28 percent less than houses that are not in foreclosure. The bank holding the mortgage often auctions a foreclosed home.


Attend the auction. Often, it is literally held on the courthouse steps. Sometimes, the auction is held at the property itself. Bring at least 5 to 10 percent of a down payment with you and be prepared to finance the rest of the house. Bid on the foreclosed home. If you have the highest bid, the home is yours.
Be aware that some banks put a minimum on the foreclosed homes that they auction, which is usually the amount that is owed on the loan. Your bid will have to be the minimum.
Prepare to bid on the house sight unseen. Some states will hold an open house before the auction, other states do not mandate this. You will get a foreclosed home for a discount, but you will not be able to negotiate any changes or repairs.
 These are homes that have not yet gone into foreclosure. You will be able to negotiate a price with the bank.


Make an offer. The bank might consider accepting a lower price for the home if the amount covers the remaining mortgage balance. Work with an agent or broker who specializes in short sales and REO homes. They will often know what the banks are looking for.
Stipulate that your offer is contingent upon appraisals, inspections and title searches. This is a benefit of buying a home before it reaches foreclosure. You get a discount as well as extra insurance as a buyer.
 If you want to buy a home at a deep discount, look at properties that have been on the market for a long time. The owner will be more likely to negotiate just to sell the house.


Look for homes that have been on the market for 6 months or more. Most sellers will grow impatient if the property does not sell after 6 months. Consider properties that need some work in order to negotiate further reductions in price.
 Housing developments started popping up during the real estate boom, and then when the market collapsed, they stopped selling. This has resulted in a flooded new construction market.


Talk to builders about what they are willing to sell their current properties for. In a development with more vacant homes than occupied properties, you should be able to negotiate a deep discount.
Look for creative opportunities for discounts. For example, if you can only get a builder to go so low on his price, ask for free upgrades in the unit such as finished basements, stainless steel appliances or no closing costs.
Set a budget.
Pay in cash.
Buy a house in foreclosure.
Buy a short sale or a real estate owned (REO) property.
Target homes that no one seems to want.
Consider new construction.
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