Tips for buying a house in a buyers market. While the South Bay real estate market has shifted slowly to favor buyers, it's important to keep in mind that it is simply a balanced market. Here are some tips for negotiating and buying a home in the current real estate market. Our free real estate services feature all South Bay cities and neighborhoods including Manhattan Beach, Hermosa Beach, Redondo Beach, Torrance, El Segundo, Hollywood Riviera, Hawthorne, Hollyglen, and Palos Verdes.  

 

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4 Tips for Buying a House in a Buyer's Market

By Holden Lewis • Bankrate.com          



 

Now is a great time to buy a house. Prices are falling, and so are mortgage rates. Millions of 

houses are for sale, and sellers are getting anxious. That's one way of looking at it.  Alternatively, 

you could say: This is a bad time to buy a house. Prices might be lower in a few months. Same 

with mortgage rates. With more than 4 million houses on the market nationally, and more being 

added daily, sellers are bound to become desperate. Why not wait them out?
In many places, it's a buyer's market in real estate, with sellers outnumbering potential 

purchasers. The resulting downward push on prices makes buyers happy. But it complicates 

matters for buyers, too. In some markets, there are too many choices to sort through. Even more 

bewildering, buyers wonder if they should wait a few months.
"They're worried that they're going to buy too soon, and the figures will reduce, and by the time

they go through the transaction, they'll have negative equity," says Mario Villena, vice president 

of Homekeys, a Miami-based online real estate brokerage. But, Villena adds, in every market 

there are peoplewho are serious about buying and don't get sidetracked by market forces that 

aren't under their control.


         For those buyers, experts have some advice:If you find the right house at the right price, buy it. Put technology and a buyer's agent to good use.Negotiate effectively.Avoid gimmicks. 

         


            
If  you find the right house at the right price, buy it
If you're serious about buying a house, this is both the first step and the final goal. To put it more 

precisely, you have to decide whether you will actively shop and then negotiate a fair deal, or if 

you'll just passively browse houses, hoping to stumble on a steal. 
You're more likely to succeed with the active approach instead of waiting (possibly in vain) for 

prices to fall further. You can't predict when the local market will hit bottom. Even if prices do fall, 

someone could buy your favorite house  out from under you. Diane Saatchi, a real estate agent 

with the Corcoran Group on Long Island, N.Y., draws this analogy: "It's like when you find a dress 

that you like, and you wait for it to be on sale, and then the sale comes and they don't have your 

size. Theoretically, you saved 20 percent. But you don't have your dress."
There's always the possibility that you'll buy a house and then the value will fall. In the  1990s, 

Southern California and South Florida had housing slumps in which it took years for prices to 

recover their previous levels. It could happen again, there or elsewhere. For that reason, "buy a 

home that can grow with you if necessary," says Elizabeth Razzi, author of "The Fearless 

Home Buyer."
"Look to the long term, because you don't know how long you'll be there," Razzi says. "You 

might have to ride out bad market conditions for a while."  True to her book's title, Razzi says 

you shouldn't let fear dictate your timing.
"You should not wait if you find the right property, because, for one thing, you're not looking 

solely for the best price. You're looking for the best home."
And keep in mind that mortgage rates have fallen about three-quarters of a percentage point in 

the last three months. "Right now is a perfect time to buy, because of a real sudden increase 

in buying power," says Bill Christiano, loan officer with MortgageIT's office in suburban 

Westchester, N.Y.
Put technology and a buyer's agent to good use

Cool technological innovations are popping up on real estate Web sites practically every week. 

Among the most useful are valuation tools. Zillow has the best known of these called the 

"Zestimate," which is a computer-generated estimate of a house's market value. Bankrate.com 

is a content partner with Zillow.com.  The Homekeys site allows users to find estimated market 

values and to search for listings with aggressively competitive asking prices. Homekeys operates 

only in Florida, whereas Zillow has nationwide coverage.  It's hard to stress how revolutionary 

these valuation tools are, Villena says: "Until recently, this was impossible. You didn't have, as 

a consumer, tools that could reasonably provide home values to you without spending 

something like $300 for each property to appraise it."
Now those estimates are free, and you can get them without changing out of your pajamas.

Villena recommends that buyers start out by playing around with Web sites such as Homekeys, 

Zillow and Realtor.com, just to find out how much they can learn about the houses in their target 

neighborhoods. Focus on finding faster ways to weed out the houses you're not interested in -- 

because they don't fit your criteria for asking price, size, neighborhood or amenities.
"If you're a serious buyer, you really have to increase the speed at which you arrive at reasonably

 priced homes," Villena says. "Those are the ones that are going to see a lot of action. You need 

to be early to that party. Start out by being more specific about the characteristics defining your 

desired home."
With so many houses on the market, it's useful to hire a buyer's agent to sort them out, says 

Pam O'Connor, president of Leading Real Estate Companies of the World, a national network of

650 regional and independent brokers. You have your pick of agents now, and "you should be 

asking what's their experience, how long they've been in the market, what price they specialize 

in,"O'Connor says.  If you find a house you like, ask the agent to perform a comparative market 

analysis -- basically, to do what Zillow does, but with the addition of human judgment. Do your 

own analysis online, using Zillow, Homekeys or a similar site if you can  find one. Compare your 

research with your agent's. If they corroborate each other, fine. If something seems amiss, find 

out why. (An experienced agent is almost surely more accurate than Zillow.)
Negotiate effectively
Right now, "there's more room for negotiation" in most housing markets because the sales pace 

slows in autumn, and prices have been falling, says Steve Habetz, president of ARCServ, a 

network of real estate attorneys.  



Villena counsels buyers to avoid the temptation to toss out lowball offers, because sellers 

won't negotiate if they feel insulted. "You have to be able to defend that offer as much as the 

seller has to be able to defendthe  asking price," he says. "If you're not making a full-price offer, 

it's not enough to pull a number out of the air. You should be able to show that this neighborhood 

has 20 comparable homes for sale, and, although I like your property, it's priced 6 percent above

 the other properties. That gives you a better footing for establishing an objective and reasonable 

negotiation. "Don't just negotiate with the seller.  "Most people think that only sellers pay 

commissions," Villena says. "They think that buyers are being serviced for free. Most people are 

not yet aware that there is a commission component reservedfor the buyer's agent. And that, too, 

just like the seller's commission, is negotiable."  How so? Some buyer's agents are willing to 

rebate a portion of their commission back to the buyer at closing. For a number of real estate 

brokerages, such as Homekeys, BuySide Realty and HouseRebate, buyer rebates are the focus

 of the business plan. Expect to make your own appointments to view houses and to drive yourself 

there if you use one of these brokerages.  Realtors associations in some states have persuaded

 legislatures to ban commission rebates to buyers.
Avoid gimmicks
You're shopping for a house, not for a Caribbean cruise or a car lease. Recently The New York 

Times reportedon a condo seller who was offering to give the buyer a year's use of a leased 

Mercedes-Benz E-Class sedan. Razzi says you'll  find all sorts of gimmicky incentives from 

condo sellers. They offer flat-screen TVs or weekends at vacation homes, or more creative 

inducements. "That has nothing to do with the transaction at hand," Razzi says. If there's an 

incentive, make sure it has something to dowith the dwelling -- upgraded countertops, decorating 

allowances, payment of mortgage closing costs, that sort of thing. "If they're willing to subsidize 

it with a $500 TV, ask for $500 off the asking price," she says.
There's another gimmick to avoid: what O'Connor calls "magic loans." This is the timeto avoid 

mortgages such as pay-option ARMs and interest-only loans, she says. If you can't afford it

with a more mainstream loan, such as a 30-year fixed or a 5/1 ARM, you can't afford it. Not in 

this market, where house values could drop and mortgage rates are almost sure to rise.

 

 
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