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

I was having a discussion with a friend last week when our conversation turned to the housing market. Bleak news upon bleak news for some people, but not for my friend.

Instead, he has been eagerly scouring the area for foreclosed homes and is of the mind to buy one or two at deeply discounted prices, fix them up, and selling each at a substantial profit. Though the local housing market isn’t as strong as it was just a year ago, people are in the market for a nicely kept ranch or colonial that costs less than $250,000, a price that is common in our area of the country.

On the surface, such an idea seems interesting especially since my friend knows how to fix just about anything and has an eye that can assess what it will take to get a home market ready. What our conversation also revealed was some inexperience in locating foreclosed homes and the best process to snag one at a price that was sensible.

Though I am no expert in the buying and selling of foreclosed homes, I have found some resources and tips to streamline the process, information I have forwarded to my friend and am willing to share with you as well:

Search Online — Several websites provide information about real estate owned (REO) properties, bank-owned foreclosures available where you live. Redfin.com, RealtyTrac.com and Foreclosures.com each feature listings of homes banks would rather not own. As the saying goes, “banks are in the habit of managing money, not property.” Therefore, if you do your research right you could offer the bank substantially less than the home’s market value especially when calculating the cost for repairs.

Repairs, Maintenance — My friend has an excellent grasp of what costs are associated with making repairs and has a good eye to inspect and find problems. Not every person in the market for a foreclosed home has that talent, necessitating that a home inspector be retained to help find these problems for them. In addition, a contractor will probably be needed to help oversee this type of project.

Use a Broker — Unless you have the skills to bid for a foreclosed home at an auction, you would be better dealing with a broker when searching for a foreclosed home. Some banks will only deal with professionals in the first place, while a broker can give you access where none would be available otherwise.

I do not know whether my friend will go ahead and snap up a foreclosure or two, but I have no doubt that he is now better equipped to handle this type of transaction if and when the opportunity arises.

Tags: foreclosure, home buy, home maintenance, home repair, home sell, real estate agent, real estate broker, real estate owned, REO