Buying real estate right now takes guts - and a clear understanding of the forces at work in the market.
Financing is tougher to get, prices will almost surely keep dropping, and as they do, your selection of a home for investment becomes more critical.
If you have the money - or can get the proper financing - and can hang on to a home for five years or more, there's a huge inventory of properties at prices not seen since 2004.
"Everything is on sale today," says Amy Bohutinsky, a spokeswoman for Zillow.com.
Ask yourself: are you really getting a bargain?
Analysts at Redfin, a discount brokerage firm, think you can. Data from sales of 9,053 single-family houses in Los Angeles County; Fairfax County, Va.; and King County, Wash., between April 15 and June 15, Redfin shows most homes fetched within 3% of asking prices.
A large number sold 10% below asking prices. Studying these sales, Redfin came up with a formula. The recipe includes some tactics that savvy buyers use instinctively and others that run counter to prevailing wisdom.
Of course, not everybody agrees that homes selling well below list price can be considered discounted. Maybe they were just overpriced, says Barry Nystedt, president of the National Association of Exclusive Buyer Agents.
"Discount implies savings from actual value, as opposed to a price reduction from an unrealistic asking price," Nystedt said.
To make realistic decisions, you have to have realistic information about the current market, and that's where your agent enters the picture. By analyzing the surrounding homes and home sales, you can arrive at a useful base price to begin your negotiations for a particular property.
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