To Buy or Not to Buy?

If you're keeping up with realty news lately, you have more than likely come across the term "buyer's market" time and time again. There are more houses on the market in most states than are being sold, and those houses are staying up for sale longer. The obvious ramification, and logical conclusion, is that sellers will be willing to part ways with their property for less than their listing price.

Throw into that mix the fact that there are more foreclosures and REO owned properties being listed by brokers than ever before, and it becomes obvious why people are interested in buying. And we haven't even started yet on the tax rebates brought in by the federal government!

That buyer's market and those options probably have you thinking that now is the right time to buy, but before you start looking, there are a couple of things we would like to suggest.

The first is, don't get your hopes up too high as far as getting a bargain basement price. Most people are only willing to drop their prices so far, and many times the decreased price will still be above market value. In other words, you'll buy for less than you would have two years ago, but the value of that home is likely to fall a bit further over the next year. It's a trend we see in every single state, and it means that buyers are still tending to lose money on their investments.

That said, not every home purchase needs to be looked at as an investment. You may just be tired of paying rent, have enough money for a good down payment, and be ready to buy a new home. In that case, it is a good time to buy, because you stand to get a good deal compared to other market situations.

So the decision to buy is going to be up to you, and what you want from your property. If you do decide to buy, though, we suggest making sure you are aware of a few important details:

Have cash ready for a down payment. It will decrease the mortgage payments you make every month, show buyers you are serious, and will mean you pay less for the house in the long run.

Remember closing costs. Many people forget to include closing costs, which average around $5000, when they budget on a new home. Have this money ready too, before you buy.

Shop around for a good rate. Even a half percent difference can mean saving thousands of dollars over the amortization period.