Making the Best of a Buyers' Market

By: Gloria Singer
A successful real estate investment is dependent on many things, but one key factor is timing. It's all fine and dandy for real estate gurus to chant "buy low, sell high", but in the real world things don't always work that way.

In today's real estate market, buyers have a definite advantage. Attractive interest rates, plenty of inventory to choose from, and best of all, sellers eager to do business make this your time to shine. Here are some tips to help you take advantage of this rare opportunity known as a "buyers' market".

This is one clearance sale where you can take your time browsing through the merchandise. View plenty of homes, taking notes on each one, and paying special attention to those that have remained on the market longer than others.

Take time to check out the foreclosure market. A good agent will help you negotiate the ins and outs of these purchases. They can take a little longer than your average sale, may involve more paperwork, and houses may need some loving care, but don't be too quick to discount them because of this; a golden egg may be lying beneath their neglected exterior.

What happens when a store has too much inventory? They have a sale and usually offer incentives to encourage you to buy. The same goes for the new home market. Builders have been left with a glut of unsold houses and many are willing to chop prices, and throw in added perks to boot. In some cases, this can amount to thousands of dollars worth of sales incentives such as free landscaping, appliances, television sets, hardwood floors, club memberships, trips to Hawaii, and even swimming pools. Seek out new developments with lots of empty homes for the best deals.

When negotiating with builders try to negotiate free upgrades. With existing homes, see if the seller will fix that leaky roof or stained carpet as well as pay for the home inspection.

When making your offer, begin with 15 percent below the asking price. It's not low enough to be insulting, and will give you a good place to begin negotiations. Always request a time frame, such as 24 hours for the seller to respond to your offer. On the other side of the coin, ensure you allow plenty of time to have the contract approved at your end and book any inspections.

Request a written warranty for one year of coverage on appliances or major repairs. If you have it in writing, at least you have something to go back to.

One way to discover the seller's true bottom line is to reject the counteroffer. You wouldn't do this in all cases, and you certainly don't want the seller to get his back up because of it.

Your negotiations should not be restricted to the seller. Your real estate agent may agree on a reduced commission. When shopping for a mortgage lender, engage at least three banks and see who offers the best terms, such as lower interest rates or reduced closing costs.