Regarding finding "buying keywords", you are absolutely right. Neighborhood level keywords are an excellent example - however it's rare that Adwords allows those types of keywords because the search volume on them is so low. The good news is that neighborhood keywords are a piece of cake to rank organically for.Adwords can be successful only if you get cheap and extremely targeted keywords. If not you will blow your budget. The popular keywords are expensive and so you will need to find "buying" keywords - where the user is ready to take a buying decision, and that way you can minimize your cost and get higher conversions at the same time.
In terms of blowing your budget - I wouldn't attribute buying high-volume competititve keywords to that as much as having a website that doesn't convert. You can always set daily budget limits to make sure you don't spend more than you're comfortable with.

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