Shopping for a Home In a Buyer's Market

How to make the most of a 'window of opportunity' in 2007 to take advantage of lower mortgage interest rates and seller flexibility. Learn these five rules for house hunting amid declining prices.
By: Marshall Loeb: Wall Street Journal Online
It's no secret that the housing market finally, after a long while, belongs to the buyer. Home sales and prices sagged in 2006, and 2007 is not expected to be too different. According to David Lereah, chief economist for the National Association of Realtors, buyers have a "window of opportunity" in 2007 to take advantage of lower mortgage interest rates and seller flexibility.

Colby Sambrotto, COO of ForSaleByOwner.com, a no-commission real estate marketplace, offers these rules for shopping for a new home in a buyer's market:

• Don't limit yourself. While you should look for homes that are listed with real estate agents, don't discount properties that are for sale by owner. They make up about 25% of the market, and you may be able to find a good deal with one of them thanks to a lack of agent commission and fees.

• Hold onto a property for a while. Now is not the time to buy a condo or home to flip quickly for a profit. Make sure you buy a property at a good value - you're more likely to have a good sale in the future.

• Take your time. There's no need to rush in this market, so don't worry about putting in the highest bid or writing a check the minute you like a place. Research the neighborhood to find out if the asking price is consistent with other homes in the area.

• Ask for incentives. To sell their homes, owners may be willing to throw in extras such as appliances, work sheds, drapes or even patio furniture for the asking price. Try negotiating some extras.

• Shop around for a mortgage. To get the best deal available, ask for as many quotes as you can. If you get a pre-approved mortgage, you'll have even more leverage at the negotiation table.