Here's what you need to know in order to make the most of this buyers' market:
Get a Great Real Estate Agent
A real estate agent can be an invaluable resource in helping you find and buy the perfect house. Agents work on your behalf to locate potential homes for you. While you can certainly use the newspaper and the Internet to search for homes for sale, agents specialize in learning exactly what is out there at any one time and can do the searching for you. You just let your real estate agent know your criteria and he or she will provide you with a list of possibilities and will set up walk-throughs so you can take a look at the promising listings. Once you find the house you want, the agent can do all the bidding for you and walk you through the buying process. And best of all, a real estate agent is paid a commission out of the profits of the sale, so you don't end up paying for the services out of pocket.
Don't Wait If You Find the Right House
There is a lot of hesitation in a buyers' market because buyers often get scared that prices will keep going down and they will miss out on better deals, or that they will experience negative equity. While those scenarios could happen, the truth is that it is impossible to predict whether the market will keep falling and there is even a chance that prices might start to rise before you find the "right" deal. The best plan is to aggressively search for a home and only buy one you can truly afford, no matter what the market is doing. Most home prices will appreciate over the long run, so in the end a little negative equity at the beginning will not hurt you if you start out in a sensible, affordable home loan.
Use Your Negotiation Power
In a buyers' market, sellers are often times very eager and sometimes even desperate to sell their houses. This gives you enormous bargaining power to negotiate for a really good price. This is especially effective if you've done your homework and know how similar real estate in the area you're looking in is priced. You can let the seller know you have found lower prices elsewhere and ask if they will match them. In most cases, there is plenty of wiggle room when it comes to the selling price.
Look for Real Savings, Not Gimmicks
In hard times, sellers will try to offer incentives to get buyers to close the deal. New home sellers will often advertise free big screen televisions, cruises, and even new cars to those who buy their homes. Yet keep in mind - you are not in the market for these things; you are trying to buy a house. Instead of taking the "door prizes," ask the seller to take the value of those incentives off the price of the home. Or if that is not an option, make sure the bonuses are things like free upgrades or landscaping. These types of incentives actually add value to the real estate and make it a better purchase for you
If you have any questions or comments about these tips for making the most of a buyers' market, use the comment link below and we'll get back to you with answers to any questions you might have.
ationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth. But if you subtract the states where nearly 60% of all homeowners are "under water" (owing more on their mortgage than the home is worth), which includes California, Florida, Arizona, Georgia and Michigan, the rate drops to about one in 10, according to a report released recently by First American CoreLogic.
Rising mortgage rates are making matters worse for prospective borrowers. The rate on a 30-year, fixed-rate mortgage has increased sharply over the past couple of weeks, according to Freddie Mac.
Higher rates coupled with lower home values means fewer people can tap their home equity. The percentage of U.S. homeowners who pulled cash out of their homes remained at a four-year low in the third quarter of this year.
ARE YOU UNDER WATER? : Have falling home prices affected your plans to relocate or refinance? If so, tell us about it by using the "comment" link below. Your identity remains private, as your email address will never be published on this site, even though it is needed in order to post a comment. We'd be interested to hear from you as to how (if at all) mortgage rates and home values are affecting your plans right now.
With the holidays just around the corner, and the economy in bad shape, many people are looking for ways to find that extra shopping money this year. Our Money editor, Stacy Johnson, has a few ideas for finding the best temporary jobs, and even temporary jobs that could lead to full time jobs. Video runs 1:35…
If you have comments or questions about this video, feel free to chime in by using our "Comment" link below. We'd love to hear from you.
Home prices are down 20% nationwide since their peak in July 2006, according to the S&P/Case-Shiller home price index. Economist Nouriel Roubini of New York University, who accurately predicted the housing slide and credit crisis, expects another 20% decline in home prices in the next year. Patrick Newport of economic forecasting firm Global Insight projects a 15% drop.
The damage will likely hit even areas that have so far escaped many problems.
The action plan if you're selling:
Wait it out
In 2010, real estate should be stronger, with fewer homes clogging the market. So if you can wait until then to sell, do it.
Make your place shine
In many markets, sellers will face the toughest competition not from fellow homeowners but from banks and builders. Both will be willing to cut prices dramatically to sell a foreclosed or new home.
To convince buyers that your house is worth paying up for, make sure that it's in move-in condition (foreclosures almost certainly won't be). Point out unusual qualities like wide-plank floors or stained glass that cookie-cutter new construction lacks.
Price it below market
Find out how much nearby homes fetched recently. Once you've figured out what a buyer might pay, price your house 5% below that.
Sound painful? A recent study by a New Jersey appraiser found that houses priced below market ended up selling for more than similar houses listed above market. That's because lower prices attract more buyers.
If you have any questions or comments about this article, please use the "comment" link below to contact us. Remember, your email address will never be published on this site to protect your privacy.
During his campaign for the presidency, Barack Obama explained where he stands on many of the economic issues that matter most to Americans.
On foreclosures, Obama wants the government to step in to help homeowners facing foreclosure.
· Allow troubled homeowners to refinance to a loan insured by the Federal Housing Administration.
· Require any financial institution participating in Treasury's Troubled Asset Relief Program to put a 90-day moratorium on foreclosures for homeowners "acting in good faith."
· Create a 10% tax credit for homeowners who do not itemize their taxes.
· Create a $10 billion fund to help victims of predatory loans.
· Authorize bankruptcy judges to reduce mortgage principal.
"…If the government can bail out investment banks on Wall Street, then we can extend a hand to folks who are struggling on Main Street." — Obama*
What do you think? Can the new President-Elect deliver on these campaign promises? We'd love to hear your opinion. Just use the "Comment" link below to sound off and tell us what you think.
