5 factors to weigh before writing purchase offer

How to get a good deal on a house

Interest rates are bouncing around record lows. Home prices are down in most areas. Many buyers who have been waiting for a good time to buy want to move forward. But there is still uncertainty in the housing market.

Nationally, the housing market appears to be stabilizing, although home prices were down 2.5 percent in 2011, according to the National Association of Realtors. The recovery is expected to be rocky and could take years. Prices might decline before they reach a plateau. This should be factored into your decision to buy.

This is not to say that the price you pay should have future possible price declines built into it. Most of today’s sellers have difficulty selling at current market value. It’s unlikely they’ll compensate you for a potential event that might not happen. But you need to know that you aren’t paying too much.

The more information you have about the housing market in the area where you want to buy, the better. The health of the housing market doesn’t only vary over time; it’s different in one location than the next. For example, in California, the San Francisco housing market appears to be picking up. That can’t be said for most inland California markets.

Before you even make the decision to buy in an area, take a look at the local economy. Are jobs being created or lost? Are public services being cut to the extent that will affect your lifestyle?

Find out if there if there is an oversupply of homes for sale, and a dearth of buyers. If so, you’re in a buyer’s market. This gives you more negotiating power. If the inventory of homes for sale is low and buyer demand high, you’re in a seller’s market.

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Even though the national housing market is still a buyer’s market, there are pockets of strength, which is usually associated with robust job creation. More employment creates more need for housing.

Armed with this information, and anything else you can find out about future plans for development or employers moving into or out of the area, you can focus in on looking at homes for sale in neighborhoods where you’d like to live.

The Internet is a great source of information. You can preview homes online, which is a real time-saver. However, it doesn’t replace the value of seeing a home that interests you in person.

HOUSE HUNTING TIP: The best way to keep from overpaying is to look at a lot of listings that have features you’d like to have in a home. Although time consuming, it’s a good way to become familiar with local pricing, and to see what’s not shown to you on the Internet, like the lack of a backyard.

Create a file of fliers you pick up at the listings and make notes about your impressions. Ask your real estate agent to let you know the selling prices of listings you liked, and the time it took to sell.

When you’re finally faced with making an offer, you’ll have a personal source of information you can turn to, which will include notes on what you liked and didn’t like about the listings you’ve seen, and the list and sale prices.

Ask your real estate agent to give you a list of comparable sales for a listing you’re trying to buy, including all photos. If a price looks too good to be true, make sure to ask for any disclosures on the property to see if there is repair work to be done.

THE CLOSING: A low-priced listing that needs a lot of work is not a good deal if the price you pay plus the fix-up cost exceeds the price of similar homes already in good condition.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of "House Hunting: The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer’s Guide."

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