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The Elder Scrolls IV: Oblivion Hints
Where all can I buy houses?
1 of 6: You can buy one house in all nine cities except for Kvatch (since it was totally trashed as a pre-game event).
2 of 6: The main reason to buy a house is to have somewhere to store loot that's too heavy to carry around and that you can't sell right away.
3 of 6: Once they're furnished, your houses will have containers in them that will never respawn. It's always more convenient to put stuff in containers than to leave it lying around on the floor (especially since items can get kicked around accidentally).
4 of 6: As you can see on the fold-out map included with the game (or my own World Map), the Imperial City is the most central city in the game world, so you may prefer to buy a house there if you're only going to buy one. Besides, at 2,000 gold, it's the cheapest of all of them.
5 of 6: Most of the time, you buy a house in a city by talking to the city's ruler about it, but not always.
6 of 6: Below are details for buying houses in each of the eight cities that you can do so in.