Lots of people are in good shape financially despite the recent gyrations of the stock market. Sure, their retirement portfolios may have taken a hit – a bad one at that – but they’re income is stable and they’re still able to stash away some cash for the future.

Moreover, there is a segment of the populace who are renting their homes and are looking to jump into a housing market that has seen double digit declines in value and sales for the past year or two. Inflated beyond belief, many markets have returned to more modest valuations, shedding years of hyper growth almost overnight.

For the person in the position to buy a home, an opportunity awaits them. However, many people are timing the market in a bid to buy in at the best possible price, particularly as housing prices hit the bottom.

Unfortunately, there isn’t any way to determine when the bottom has been reached, and that usually becomes apparent several months after a recovery has begun. For these home buyers, the bottom has been missed and they’ll end up paying more for their homes, perhaps thousands of dollars more if the market rebounds quickly.

I like to read various real estate publications and articles to see what the experts say about when to buy a home, but cannot give to you consensus based on what has been written. Clearly, there are contradictory statements being made, information which can leave you more dazed and confused, than reassured.

Happily, there are some things to consider which can help you get in the market at a good price, bottom being hit or not. Sure, prices may continue to drop later on, but if you’re planning to be in your home for at least five years, you should recoup your investment and then some. Consider the following:

Your local market has already retreated considerably – Get with a real estate agent who knows your local market and ask her to pull up price comparables (comps) over the last few years. Some of that information may be online, but if there is a specific neighborhood that you like, get reports for that area directly. Try to find similar sized homes and compare what those homes sold for 1-3 years ago and what they are selling for today. If the drop has been sharp, the worst of the pull back has likely taken place, but if the decrease has been small, there could be additional changes over the next several months. One caveat: that neighborhood could be incredibly stable, bucking local trends or the opposite may be happening.

Your local economy is turning the corner – Newspapers, television news shows, and online publications can be good sources to help you discover what the job market is like in your area. Is a major company cutting back, instituting a hiring freeze, or have they announced an expansion which will lead to new jobs? One company’s good fortune doesn’t make for an improved market, but if you’re hearing good reports from several employers, then housing demand will soon climb as people move into your area. One more sign: new home builders are putting up fresh housing developments – they don’t start new projects in a sour economy.

You have enough money for a down payment and are pre-approved for a mortgage – Perhaps the best reason to buy a home now is that you have the financial wherewithal to swing a sale. You not only have a significant chunk of change to put down, but you’ve lined up a mortgage, and you have enough cash left over to cover closing costs, make monthly payments, etc. Guess what? The market may not have bottomed out, but you’re in an excellent bargaining position to pay even less than what the owner is asking. You don’t want to make a low ball offer, but a bid that shaves 5% off of the asking price is definitely reasonable.

The national economy may be going through a recession, but your personal economic forecast could be a good one. Waiting for the market to “bottom out” could end up being a wonderful opportunity missed, so don’t delay – there are bargains out there awaiting you today.

Tags: Home Buying, housing market, real estate, real estate agent, real estate market

The current housing market is a wonderful ally for home buyers, as home values drop and sellers are willing to negotiate. Home shoppers previously shut out of some local markets are discovering that the scales have tipped in their favor, potentially saving them tens of thousands of dollars over last year’s prices.

Still, there are other ways for buyers to save, even beyond the cost of the house itself. Lets take a look at the three areas where home buying costs can be trimmed:

At the point of sale — Maybe you aren’t aware of just how depressed the housing market is in the area that you live. It can be easy to miss especially if you live in a metropolitan area where some neighborhoods are experiencing steep declines in housing values while others are stable, even rising. Get with a realtor who can supply the information that you need for the area you are considering. She’ll be able to go over the buying and selling trends including how long homes are on the market, recent sales, etc.

At the point of financing — Competition is fierce in the mortgage industry, especially as the number of mortgage companies suffering from the sins of their past (i.e., interest free and other risky loans) continues to rise. Even mortgage companies who aren’t saddled with a lot of bad loans are finding that their customer base has shrunk with many laying off workers. The remaining companies all want your business and, if your credit score is at least 700, you are the catbird seat. Negotiate the lowest rate and fees possible and get that information in writing — brokers would love for you to pay more for your mortgage (higher commissions for them), but if your credit is excellent you can avoid the heavy fees and higher interest rates.

At the point of closing — Closing costs can easily add up to $5000 or more, making the day that you buy your home one filled with mixed emotions: on the one hand you’re happy to get the home, but on the other hand, your wallet just took a huge hit. Some mortgage companies are absorbing most if not all of the closing costs to entice you to their product which is fine but only if you aren’t getting hit with a higher interest rate and other fees. You can also ask the home’s seller to pay for some of these fees too, perhaps making closing day pain free from a financial vantage point.

Take Advantage of the Market While It Lasts

Not everyone is in a financial shape to buy a home now, but if you are you just could find yourself owning a home that will appreciate greatly once the market rebounds. Buy at a price below market value, secure the best loan available, and have someone else pay your closing costs, to save tens of thousands of dollars on the price of your new home. Current market conditions will change — waiting for prices to bottom out could mean that you will miss a perfect opportunity to jump in.

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Tags: closing costs, Home Buying, home sell, mortgage broker, mortgage rates, new home, real estate agent, realtor

By Sarah Scrafford, Guest Writer

You would think that the process of buying a first home just got easy what with the slump in real estate prices, but that’s not so, not with lenders being wary of financing mortgages for fear of defaults and no shows. Some people may find it easy to convince mortgage lenders to come around to their point of view, but only if their parents come along for the ride. If mom and dad are willing to foot the bill for your purchases even though you’re all grown up and have left the apron strings behind, then here’s how they can help:

By signing a joint mortgage: The lender takes into account both your income and debt and that of your parents to calculate your mortgage amount. The property, while for all practical purposes seems to belong to you, is titled to both you and your parents. And even though you are financially able to make the repayments yourself, both you and your parents are responsible for late payments and/or defaults.

By signing a guarantee: Your parents are sometimes allowed the option of acting as guarantors for any part of the mortgage amount that you cannot afford to pay. Some lenders allow parents to act as guarantors based on just their financial positions even if they do not hold regular jobs. This option is better suited in terms of ownership since your parents’ names are not featured on the property deed or on the mortgage documents. When you’re financially secure enough to meet the payments through your own efforts, your parents’ part in the process can be relegated to the past.

By offering to pay the down payment: A typically straightforward method, this option allows you to seek a lump sum of money from your parents. The only thing you need to agree on is whether the loan needs to be paid back at zero or at a nominal interest rate, or if their loan is in actuality a gift. If you must pay back the money, set down the terms on paper so that there are no misunderstandings later on.

By matching savings: Some parents may offer to match you dollar for dollar on how much you have saved up, a throwback to the game you played as a child where you were taught the value of saving for a rainy day.

By helping with additional expenses: Buying a home entails more than just paying the down payment and negotiating a mortgage. There are other minor costs involved in the entire process and some parents prefer to remove this burden from their offspring’s shoulders. Others may help out by furnishing the house or buying appliances.

While mom and dad are around to give you the boost that you need, remember, repayment is one rope that you have to climb on your own.

So make sure that you appreciate their efforts and don’t go running to them each time you’re unable to make a payment through choices of your own making.

Author Information:

This article is contributed by Sarah Scrafford, who regularly writes on the topic of international home listings. She invites your questions, comments and freelancing job inquiries at her email address: sarah.scrafford25@gmail.com.

Tags: first mortgage, Home Buying, home loans, house payments, mortgages, parental loans