After years of soaring price appreciation, the U.S. real estate scene has finally cooled off, making it a buyers' market again. If you are looking to buy a house, you have great advantage over home sellers because there are plenty of new and existing homes available, with each seller competing with the others for your offer. Prices in many areas of the country are lower than they have been in years and interest rates are still low based on historical standards. Yet even with all this on your side, it is possible to slip up. Here is what you need to know 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 at this time. 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 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 that you can truly afford, no matter what the market does. 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 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 have done your homework and know how similar real estate in the area is priced. You can let the seller know that 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 that 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.