Milk a Buyer's Market
Negotiate With home prices sinking, you’ve got extra negotiating clout. One trick: See how many homes in your prospective neighborhood were sold last year and use that as a bargaining chip, recommends Jon Boyd, president of the National Association of Exclusive Buyer’s Agents.
Be Diligent Look to see how many homes are on the market now, says Boyd. There may be an oversupply, and if so, prices are likely to drop -- make sure you make an appropriately low offer.
Lowball If you consider only past sales, you may overpay. For houses that have been on the market for longer than a year, make a “lowball” bid of at least 10 percent below the asking price, suggests Ilyse Glink, author of 100 Questions Every First-time Home Buyer Should Ask.
Home-buying Myths: True or False?
"Location, location, location.” Definitely true. Say you’ve found a big, beautiful bargain with one teensy problem: It’s next to some railroad tracks or in a semiseedy neighborhood. Pass it up. You may be able to live with the flaw, but if you move, other home buyers may not be as understanding, and your home could sit on the market for years.
“A home is a good investment.” Not always. If prices are falling or stagnant and you decide to move a few years later, you may not recoup the closing costs.
“Buy the most house you can afford.” Not! The term “house-poor” was created for a reason -- to describe homebuyers who eat Ramen every night because their mortgage consumes every cent they earn. Make sure you’ve got enough moola left over to cover any repairs, maintenance, and vacations.
"Mortgage Calculators " are a great way to see what you can plan to pay every month.