If you are in the market to buy a home, you are in one of the biggest purchaser's market in more than a decade. As real estate prices continue to fall and even more properties sit with no buyers, quality purchasers have the advantage. We are not suggesting that you going out and bidding on 20 listings because prices are low. We're addressing well meaning buyers who are looking to purchase a house to raise a family in, with reasonable credit ratings and a decent amount of money down. Both sellers and mortgage lendors want to work with these buyers, and the home purchaser has all of the options.



In this market, the sellers and mortgage companies are hunting for buyers, and the buyers have strength.

Buyers have Options in a Down Real Estate Market

In a depressed real estate market, the home buyer has many choices. From 2002 to 2004, buyers were driving up prices to invest in house, often getting into bidding wars on homes within days of the initial showing. Jump ahead to 2008 - hundreds of thousands houses remain with no buyers for months and months - before a buyer is found.

Today, the home purchaser has less competition. He can spend time consider many houses to select the one that is the best fit. With very low interest rates, she can also borrow from the current home, (assuming the real estate has equity) to expand or renovate. Still others are still waiting, to see if the market falls further, if making the real estate move.

Buyers Have The Upper Hand

With a wide range of sellers and few purchasers, the purchasers have the upper hand. Real estate sellers are getting fewer offers than ever. Good real estate will still sell, but at a reduced price. Poor quality home may not pick a home buyer at all. A reasonable offer where with a sufficient down payment and lower mortgage risk - is very attractive to the seller.

How Much Should You Offer?

This is always a hard question to ask. Ideally, you want to bid as little as possible so that you are able to get the home at the best price. However, we do not advocate walking in to a $500,000 home and low-balling $200,000. The seller will likely ask you to leave, not consider any other offers you may present and the seller's real estate broker will remember you - especially if you try to another of his clients' listings.

Review the House to Decide What it is Worth

Before making a bid, you should truly sit down with a pen and paper and figure out how much this house is actually worth. How does it compare to other homes currently for sale? How does it hold up to houses that have sold in the last 3 months? Compare both the type and size of the home as well as the location; a 4 bedroom home on option side of town may be worth more or less than a 4 bedroom home on the other side of town. Use a free reference guide, such as HomeBuyersGuide.com to help you assess the area as well as each house you visit.

You Must Use a New Home Inspector

While you do not have to, it would be crazy to make a residential real estate purchase without using a home inspector or engineer (unless you are personally qualified). They are not falling in love with this home; they have no emotional attachment. They can evaluate it objectively and identify all of the problems. They may be able to provide you with guidance to the rough cost to make essential and non-essential repairs to the home.

Do You Want to Live Here the Next 10 Years?

People bought houses speculatively from 2002-2006, leading to the problem in the residential real estate market today. These purchasers inflated prices, are now sitting on dozens homes and, in many cases, are turning to bankruptcy. Don't expect to be able to get out of this house quickly. Be sure you really want to be here.

Think Your Offer Through

There are basically two kinds of offers you can make when looking to purchase a new home. Each takes a different strategy; any can work well in the right situation.

Low Ball Offer - here, you bid below fair market with an offer on the home. Even considering repairs, recent sales and other items, you are generally underbidding on the home. If the seller is distressed, the house has been for sale for an extended period of time or the seller no longer resides in the home, you may have a chance with a low ball bid. Keep in mind where it is one thing to come in with a low offer; it is an entirely different situation to insult the seller.

Reasonable Offer - here, you have factored in recent prices, defects and necessary repairs required, recent prices, how long the home has been for sale and the current market in your area. Discount the price if it is a slow market; this is not the same as the low-ball which may be 20-50% below reasonable prices. Your offer should discuss:

Your bid

Reasons why you are bidding less

Expected closing date

The percentage you will be putting down as a good faith deposit deposit

What amount you will be paying towards the price

The mortgage terms you will be seeking

Many home sellers could take slightly lower offers from purchasers who are offering all cash or 30% down subject to a 70% mortgage, as opposed to a higher offer where the home buyer wants to put "no money down" and get a mortgage for the entire purchase price. The first will stand a better chance of actually following through and buying.

Summary

Sadly, the nation is in a significant down market in the residential real estate industry. However, this creates opportunity for buyers. If you are able to benefit as a buyerin this market, you are in the driver's seat. You will have your choice of houses and will be able to pick great values.