Real Estate 101: Buying In Today's Market

If you’re considering buying a home in 2009, it’s important to keep in mind that buying a home today—with the current housing market conditions—is quite different than buying a home in the past.

Here are a few key tips for buying in today’s market:

Organize your finances and make a budget. You’ll need to be sure all of your finances are in order and that you can afford to buy a home. Make a good household budget and leave plenty of room in it for fluctuations in housing prices and in the general economy.

Work on your credit score. If your credit score is low, your options for a mortgage may be limited. Also, the FHA, Fannie Mae and Freddie Mac have all instituted a sliding scale of fees based on credit scores, so pumping up your score is critical.

No down payment? Not anymore. The days of no down payments are, for the most part, done and gone. If possible, start saving now for your down payment. Check with your lender or broker about current down payment requirements.

You do have mortgage options. If you have good or excellent credit, you will have more options in terms of a mortgage. Although the credit crunch has permeated the entire mortgage market, you can avoid higher fees or interest rates if you have good credit.

Keep an eye on rates. The Federal Reserve has cut the prime rate several times recently and may continue to do so in the near future. This may lead to lower overall interest rates. However, don’t wait too long to lock in as rates could start to go up at some point during the year.

Talk to a tax attorney. The new $7,500 tax credit for first-time buyers is just one of the new tax laws that will take effect in 2009. Before you buy, talk to a tax attorney or accountant about how buying in 2009 will affect your tax status.

There are good deals to be had. Yes, housing prices have dropped considerably over the last two to three years, but that doesn’t mean you should buy more house than you need. Stay within your budget and don’t overspend.

Current “comps” are vital. With housing prices constantly changing, make sure your real estate agent finds the most current comps (comparable selling prices in your area). One of the keys to negotiating successfully is to know the selling prices of other area homes.

Look at average time on the market. If you’re buying and selling at the same time, take into account average time on the market. You may be able to buy quickly, but if you have to sell, average time on the market is a lot longer today than it has been in the past few years.

Good luck and happy buying!  ∆