7 Tips to Buy Smart in Today’s Market

When it comes to home purchases, everyone wants to buy low and sell high. “Now is the low; high is just around the corner,” says Alexis McGee, foreclosure information expert, educator, and president of foreclosure property information specialists ForeclosureS.com.
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“Already pending home sales are climbing in the North, and appear poised to rebound in the South and West, according to the most recent National Association of Realtors Pending Home Sales Index. NAR also predicts existing home sales will climb more than 6% next year, and that median prices — down this year — also will climb in 2009.”

With interest rates at a 35 year low, affordable financing, and abundant inventory, it’s a buyer’s market. “There are plenty of great opportunities that make the American dream of homeownership more affordable today if you know where to look and how to make the right deal,” says McGee, also author of “The ForeclosureS.com Guide to Advanced Investing Techniques You Won’t Learn Anywhere Else” (Wiley) and “The ForeclosureS.com Guide to Investing in Pre-foreclosures Without Selling Your Soul” (Wiley).

A recent survey from Trulia.com by Harris Interactive® indicated that more than half of Americans would consider purchasing a foreclosed home. “It sounds like those Americans recognize a good deal,” adds McGee. “So what are you waiting for? It’s bargain time. Buy now.”

McGee offers a few tips to help you buy right in today’s markets:

- Do your homework before you buy. That means know the local market, the going price in a specific neighborhood, and what kind of financing is available. You can get free information and guidance online at sites like ForeclosureS.com (www.ForeclosureS.com) and the National Association of Realtors (www.Realtor.org). But beware those websites that promise instant riches for “no effort and no money down.”
- Open your eyes to the opportunities that surround you. Even cities with high foreclosure rates have motivated sellers in sought after neighborhoods — where well-priced homes resell quickly.
- Make sure you know the current prices for comparable properties in the area. With markets in flux, prices from three months ago no longer are good enough.
- Don’t be afraid to ask for a discount. To figure your offering price don’t forget to deduct the costs of necessary repairs and rehab and your profit. If you’re buying a property with plans to turn around and resell it, deduct from your offering price the cost of buying, holding and selling the property until you find a buyer - and don’t forget to pencil in your profit!
- Don’t be derailed by marketing come-ons, gimmicks, and “insider secrets”. If it sounds too good to be true, it is.
- Beware the “great deals” at the auctions. Competitive bidding drives up prices. Instead of buying a house at discount, you could end up paying full market price or more if you factor in auction commissions and fees.
- Consider FHA as a low-cost, safe financing alternative. With new higher loan limits, interest rates at 35 year lows, and home buyer tax incentives still being ironed out in Congress, this is an excellent opportunity for you to buy low.