The changes in the current real estate market require home buyers to apply a different strategy to their home purchasing than in an up market. Buyers who adjust their strategy to take advantage of lower home prices will be able to avoid costly mistakes, and find success in purchasing a home at a good price. Remember, although there are expected ups and downs in the market, real estate continues to be a wise investment. The current market requires more planning, but you can still find success in today’s market. Listed below are some helpful strategies for buying in the current real estate market.
Seek out properties in areas that have remained fairly stable or have only experienced a slight decline. These areas will turn around the quickest when housing prices increase.
Study the pricing trends in the particular area where you are planning a purchase. This will help you determine if the home you are planning on purchasing is a good investment and will retain its market value.
- Look at the number of houses that are for sale in a given area where you are planning to purchase.
- Check the asking price.
- Analyze how many homes sold in this area within the last month, the last 3 months, the past 6 months, and the past 12 months.
- Determine the sold prices for the houses, the discount on the home prices, and whether the closing was a Seller Paid Closing. If so, ask what percentage the seller paid at closing.
- Look at the Days on the Market (DOM) for these homes.
Analyze the Comps (Sold Comparables) This is one of the numbers that you must pay attention to during the home comparison process. In the current market, comps are important but the number of “Days on the Market” (DOM) helps to tell the rest of the story. First: Analyze the length of time the properties are sitting on the market before they sell. Second: Look over the last 3 to 12 months of the sold comparables. Have the homes been discounted? Check to see how many homes are for sale in the same area and check the asking prices.
Review the provisions of The Housing and Economic Recovery Act of 2008. Many eligible homeowners and first time buyers may find home ownership more affordable. The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the home purchase. Additional provisions include a modernized and expanded FHA loan program, assistance for veterans, and the HOPE for Homeowners Act 2008. If you are considering the purchase of your first home, an interest free refundable tax credit of $7500 includes purchases on or after April 9, 2008, before July 1, 2009.