4 of 5
A $120,000 price cut
A $120,000 price cut
Robert and Katie Alford avoided the exurbs and are now moving into a bigger home in Tempe.
Location: Tempe, Ariz.
Home: 3 bedroom, 2 bath house
Price: $200,000

Robert and Katie Alford have friends who chose to buy big homes way out in the far-flung exurbs of Gilbert or Queen Creek, Ariz., but that was not for them.

"It was a more cost-effective for us to buy a smaller place in Tempe," said Katie.

So two years ago, they purchased a 1,200-square-foot, two bed, one-bath condo for $189,000. It saved them a bundle in commuting costs because it's just miles from the school where Katie teaches and is near Robert's job as a college academic counselor.

"It's more desirable to live in Tempe," Katie said. "The neighborhoods are older, more established. And there's no scorpions."

Her friends on the outskirts apparently spend a good deal of time in hand-to-claw combat with the awful little arachnids. That's not what Katie wanted.

But now the couple is moving up into a 2,000-square-foot house, thanks to steep home price declines in the area. Two years ago, the owner listed the property for $320,000.The couple is going to rent out their condo and then sell it when prices recover a bit. Meanwhile, the monthly payments on their house are actually lower than on their condo, thanks to a great mortgage rate and a bigger down payment. (They were able to save up because they weren't spending all their cash on exterminators, no doubt.)

They also got a 20% rebate on their agent's commission because they used discount broker ZipRealty, whose policy is to return that to the buyer.

NEXT: Helped by homebuyer tax credit

Last updated July 09 2009: 5:00 PM ET
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