The housing market has started to heat up due, largely in part, to the $8,000 credit given to first-time homebuyers and the $6500 tax credit for repeat homebuyers. A house must be under contract by April 30, 2010 in order to receive the credit, and this has led to an increase in buyers looking for a home, allowing one to also take advantage of low interest rates and housing prices.
According to Jean Chatzy, financial editor to The Today Show, in an April 27, 2010 interview with Matt Lauer, there are some things potential homebuyers need to be aware of before diving into the market.
Make Sure Your Finances are in Order Before Making an Offer
Look at all 3 of your credit reports, reported from Equifax, Experian, and TransUnion. Be sure that your credit report is in good shape, fix any errors you may find. Visit myfico.com or creditkarma.com for access to all 3 reporting bureaus and have your credit report checked in a matter of minutes. Better credit scores will ensure locking in a lower interest rate.
Have cash in the bank. Unlike the days of old, having money for a downpayment is now a requirement, with a minimum of 10 percent down. Some lenders may require 20 to 25 percent down, depending upon the property being purchased.
Get pre-approved for a mortgage before you begin looking. In this market, many real estate agents and sellers are unwilling to work with buyers who do not have a pre-approval letter. According to Lisa Scherzer in the August 6, 2009 The Wall Street Journal Smart Money article "7 Tips for Getting a Pre-Approved Mortgage", agents and sellers see pre-approved borrowers as more serious, and, says Scherzer, "when it's time to make an offer, a preapproved buyer will be in a better position to negotiate".
Know Where to Find the Best Deals in Your Area
Look locally in your area to determine if prices are going up, down, or have stabilized. Sites such as trulia.com gives consumers housing market stats and trends, and tells homebuyers what houses are actually selling for in a specific area. This takes the guesswork out of determining whether a house a homebuyer is interested in in any given area is overpriced or underpriced.
All areas are different, so it is important for homebuyers to do their homework. Bigger, pricier homes are staying on the market longer, so it may be easier to negotiate a better price on these homes.
Look into bank-owned property. These houses are normally priced lower than seller-owned property.
Sources:
Scherzer, Lisa, "7 Tips for Getting a Pre-Approved Mortgage". The Wall Street Journal Smart Money. 2010 Dow Jones & Company. www.smartmoney.com
Bell, Jim (Producer), Chatzky, Jean, "Spring into the Market to Buy a New Home". The Today Show. 27 Apr 2010. www.msnbc.com
Valerie Williams - Valerie Williams resides in the Metro-Atlanta area. She earned a Bachelor of Arts degree in Organizational Management, and has spent much ...
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