A dollar certainly doesn't buy what it used to. But it can still fetch you a bargain or two, if you look in the right place. Money Editor Stacy Johnson explains… (video runs 1:33)…
Know of any other ways to save a dollar during these tough times? Share them with our readers by using the "comment" link below. We'd love to hear from you.
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Between rising foreclosures and falling home prices, housing issues became a huge concern in the months leading up to the election. As such, they're likely to continue to take priority during President-elect Barack Obama's first term.
"This is really an unprecedented crisis we're in," said Peter Tatian, senior research associate for the Urban Institute, referring to the foreclosure problem and its ripples through Wall Street. "People are still trying to figure out what the size and the nature of the problem is, and how to intervene to solve things."
A full slate of complex housing woes needs to be addressed, from the restructuring of mortgage giants Fannie Mae and Freddie Mac to the modernization of the Real Estate Settlement and Procedures Act, which governs home sales.
But foreclosures are likely the No. 1 concern, because that problem is a big one.
According to a report from Credit Suisse, 6.5 million loans were expected to fall into foreclosure over the next five years. That's based on home prices dropping 10% in 2008 and 5% in 2009, before rising 3% in future years.
The Center for Responsible Lending estimated in August that nearly 2.2 million foreclosures would occur due to defaults on subprime loans from late 2008 through the end of 2009. More than 40 million homes in neighborhoods surrounding those foreclosures would suffer price declines as a result, causing a $352 billion total decline in property values, or an average $8,667 per home.
Federal and mortgage industry efforts are already underway, with various degrees of success, and will continue to evolve before Obama takes office.
On the campaign trail, Obama proposed a three-month moratorium on foreclosures for banks or lenders getting money from the $700 billion federal rescue plan — if the customer is making a good-faith effort to make payments and renegotiate the mortgage.
What do you think, realistically? Will Obama be successful in getting a three-month moratorium on foreclosures passed, or will that promise fall into the "Campaign Rhetoric Garbage Can"? We'd love to hear your opinion. Just click the comment link below and tell us what you think.
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Here's what you need to know in order to make the most of this buyers' market:
Get a Great Real Estate Agent
A real estate agent can be an invaluable resource in helping you find and buy the perfect house. Agents work on your behalf to locate potential homes for you. While you can certainly use the newspaper and the Internet to search for homes for sale, agents specialize in learning exactly what is out there at any one time and can do the searching for you. You just let your real estate agent know your criteria and he or she will provide you with a list of possibilities and will set up walk-throughs so you can take a look at the promising listings. Once you find the house you want, the agent can do all the bidding for you and walk you through the buying process. And best of all, a real estate agent is paid a commission out of the profits of the sale, so you don't end up paying for the services out of pocket.
Don't Wait If You Find the Right House
There is a lot of hesitation in a buyers' market because buyers often get scared that prices will keep going down and they will miss out on better deals, or that they will experience negative equity. While those scenarios could happen, the truth is that it is impossible to predict whether the market will keep falling and there is even a chance that prices might start to rise before you find the "right" deal. The best plan is to aggressively search for a home and only buy one you can truly afford, no matter what the market is doing. Most home prices will appreciate over the long run, so in the end a little negative equity at the beginning will not hurt you if you start out in a sensible, affordable home loan.
Use Your Negotiation Power
In a buyers' market, sellers are often times very eager and sometimes even desperate to sell their houses. This gives you enormous bargaining power to negotiate for a really good price. This is especially effective if you've done your homework and know how similar real estate in the area you're looking in is priced. You can let the seller know you have found lower prices elsewhere and ask if they will match them. In most cases, there is plenty of wiggle room when it comes to the selling price.
Look for Real Savings, Not Gimmicks
In hard times, sellers will try to offer incentives to get buyers to close the deal. New home sellers will often advertise free big screen televisions, cruises, and even new cars to those who buy their homes. Yet keep in mind - you are not in the market for these things; you are trying to buy a house. Instead of taking the "door prizes," ask the seller to take the value of those incentives off the price of the home. Or if that is not an option, make sure the bonuses are things like free upgrades or landscaping. These types of incentives actually add value to the real estate and make it a better purchase for you
If you have any questions or comments about these tips for making the most of a buyers' market, use the comment link below and we'll get back to you with answers to any questions you might have.
Filed under Home Buying Tips, Most Recent Post by DiMarzo Realty, Inc.
Did you know that certain fruits and vegatable are best NOT kept in your refridgerator? Some are even bad for other foods if stored together.
In this day and age when everyone is trying everything they can to save money, these produce tips could help. This video runs 1:34, but you may want to watch it twice so you'll remember what should go where.
If you have any questions about this video, or other tips you care to share with our other readers on what keeps best where, use the "comment" link below to tell us your tip. We'd love to hear from you!
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How will Obama affect your wallet? And what do you think the new President and Congress needs to do to right the economy - both in the short run and the long term?
We'd love to hear YOUR opinion. Click the comment link below and tell us what you think the President-Elect should do to fix the mess our economy is in. We may just pass your comment on to Congress, or the White House. So go ahead, sound off!
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