Buying and selling homes in a hard economy - AmericaNowNews.com

Buying and selling homes in a hard economy

They didn't quite take a bath on the sale of their home, but the seller's market was enough of a wet blanket to give empty-nesters Lee and Anna Grehan hope of better luck in the buyer's market.

"This IS a buyer's market," said Anna Grehan. "We're hoping because somebody got a deal on our house that we will snap up a deal. The rates are very low, so we want to take advantage of that."

Robert Irwin, a California real estate broker and investor (www.robertirwin.com) told consumer resource Bottom Line Secrets magazine that for buyers to take advantage of the lowest mortgage rates:

* Their down payments would have to be 20-25 percent.

* Their credit scores would have to be greater than 740, preferably closer to 780 or 800.

* Their debt-to-income ratios would have to be less than 45 percent.

Leon Dickson, Sr., broker/owner of Memphis-based Benchmark at Southwind LLC Realtors, said rates and prices are just two components. He suggested buyers should hire home inspectors and realtors to dig out the hidden details behind those prices.

"Condition of the house, or the amenities, seller concessions -- they would need that information or that direction from a realtor," Dickson said.

Folks selling their homes will face the same reality checks as the Grehans did. They can't put off nagging repairs. Those should be completed before even considering showing their homes.

They should also price their homes carefully, not based on their tax assessments, but on the sales comparables, or "comps", in their neighborhoods. Dickson said sellers can count on either a loss or very little earnings, but they're likely to rebound when they test the buyer's market.

"More than likely the area that you are going to buy in, the properties may be a little lower as well, so you'll recover a little of your loss on the purchase end," he said.

The Memphis Area Association of Realtors (www.maar.org) has assembled these tips for both buyers and sellers:

QUICK TIPS FOR BUYING A HOME

* REMEMBER, YOU'RE SEARCHING FOR THE RIGHT HOUSE AND NOT THE PERFECT HOUSE. This doesn't mean that you abandon the criteria most important to you.  But it does mean that you need to prioritize your needs and desires and determine where you are willing to compromise.

* STAY WITHIN YOUR PRICE RANGE. You may "love" a house that costs considerably more than you can comfortably spend, but you won't love being "house poor."

* CHOOSE THE RIGHT REALTOR FOR YOU. This means finding someone with expertise about the area where you intend to buy and who understands your goals. No one is an expert about all things and all locations. Make sure you're comfortable with the person and don't automatically choose a friend, relative or friend of a friend.

* ACT LIKE A REPORTER. This is especially important if you are new to the market and have little or no knowledge of the area. Read. Ask questions. Read some more. Ask more questions. Study the market data.

* GET A HOME INSPECTION. Most people wouldn't consider buying a pre-owned vehicle without having a mechanic look under the hood. It's no different when buying a house. A home inspector can evaluate the home's physical condition and identify items that need to be repaired or replaced.

* ORDER A SURVEY. This is one of those better-to-be-safe-than-sorry scenarios. A survey will show the location of the buildings, fences, driveways, easements of record, boundaries of the property and will inform you of any encroachments that could hinder your ability to sell the property in the future.

* DON'T RUSH. While some home-buyers do suffer paralysis by analysis, you don't want to go to the other extreme and make a huge purchase on emotion and impulse. Take your time.

QUICK TIPS FOR SELLING A HOME

* YOU GET ONE CHANCE TO MAKE A FIRST IMPRESSION. So before the first potential buyers grace your door, make sure your home is walk-through ready and that the exterior of your home is neat and clean. Curb appeal is crucial and so is that initial impression.

* CREATE A "CLUTTER-FREE" ENVIRONMENT. Remember all those times your mother told you to clean your room and you didn't? This is payback. Your house must be easy to show and that means every room should be clean, attractive, inviting.

* MAKE SELLING YOUR HOME A PRIORITY. This means making your home available for showing at a moment's notice. Remember, you want to make things easy for the potential buyer.

* BE SURE YOU PLAY THE "PRICE IS RIGHT." The best time to price your home correctly is when it first goes on the market. If your home is overpriced, people will bypass it for a similar house priced at market value.

* LITTLE IMPROVEMENTS CAN HAVE A BIG IMPACT. Make obvious repairs, landscape where appropriate and consider staging the interior of your home. If nothing else, the fact that potential buyers don't notice cosmetic flaws -- from shaggy shrubbery to dirty floors -- keeps them focused on your home's strong points.

* UNDERSTAND THAT STRANGERS PROBABLY WON'T LOVE YOUR PETS THE WAY YOU DO. Ideally, Fido and Fluffy stay with friends or relatives every time you have a showing. If that's not possible, place your pet in the least distracting place possible, spray with deodorizer and light a candle. Stow the litter box, bowls, beds and toys.

* MAKE SURE THE BUYER CAN AFFORD YOUR HOUSE. A reality of today's market is that financing is becoming more stringent. Unless the buyer has been pre-approved for a mortgage large enough to purchase your house, an "offer" won't go very far. 

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