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Buying a home in a buyer's market

In real estate whenever sellers out number buyers, the situation tips in favor of the sellers and as a buyer you need to exercise shrewdness if you are to get ahead of the pack, and the following guidelines can come in handy;

1. The first step to the homebuying process is to assess your financial situation, make relevant pre-purchase decisions like the amenities you want based on a range of price factors the common principle is that a home which is 2.5 times your annual income is affordable or your monthly payments (including interests) should equal one-fourth of your gross pay or one-third of net pay.

2. Sources of finance are; Mortgage brokers they work with various lenders, Commercial banks offering a variety of options and rates are competitive, Savings and loan associations process of getting a mortgage much easier compared with banks, Mortgage bankers they work banks, Credit unions interest rates and terms are very attractive and competitive, Stock brokerages and online lenders deal only with reputable companies.

3. It is advisable to shop around for the best mortgage deal that fits your requirements, bearing in mind that there are countless unscrupulous lenders exploiting customers through hidden costs. One-stop shops may inconvenience you if a problem arises.

4. According to new laws new homeowners are entitled to $8000 tax credit, so you should take advantage and it is important to note that some loans require impound accounts; these are trust accounts meant for holding your real estate taxes, mortgage and homeowners insurance premiums as you pay monthly.

5. The sales history of homes in a neighborhood informs you on the ratio between listed price and selling price of a home.

6. When purchasing foreclosures, calculate the exact amounts you are willing to spend towards the property, away from the mortgage, tax payments and check for any outstanding amounts on the property like unpaid contractors and taxes.

7. In order not to miss on excellent opportunities, it is wise to secure the necessary funds well in advance, while sharpening your negotiating skills can be useful.

Viewing and buying

1. The nature and character of a neighborhood directly or indirectly affects those who live in it. It is therefore important to do your homework regarding the ones matching your lifestyle.

2. It is best to inspect homes more than once, with the aid of a checklist provided by the agent or appoint a qualified inspector.

3. Although not advisable for first time buyers, when opting for a distressed property or fixer uppers, you should calculate the cost of improving it and decide based on your budget, on the other hand newly constructed homes are being offered with special incentives, as developers resort to attractive deals to push units.

4. When going the auction route, potential buyers can try talking to the defaulting seller for a bargaining deal which leads to the auction's cancellation.

5. Before signing any agreements, it is important to read them thoroughly or make use of an attorney, be on the lookout for unexpected extras at settlement. An "inspection contingency" safeguards you, in case the inspector discovers defects on the property, empowering you to cancel.

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