5 Tips for Moving in a Buyer's Market

June 20, 2010, By Kasie Baltes 0 comments

Kasie Baltes

Maybe the thought of brown boxes and overflowing U-Hauls send you into hysteria, yet the fact is it’s a buyers market. Whether you’re looking for your first home or looking to upsize, this is the time to take advantage of declining home prices. In addition to affordable home prices, Reuters reports that U.S. 30-year fixed-rate mortgages are near an all time low at 4.72 percent. This combination makes it the perfect time to buy a home.

Before you pack up the kids, the dog and every little item you ever owned into a 2x3 box, there are a few things you should know about buying a home.

Understand Your Credit Score

Who would have ever dreamed that three numbers could stand in the way of buying a home? This score determines whether or not you can get a mortgage and the interest rate, which you pay monthly. Your credit score is a lot like a worn down suitcase. It’s filled with your payment and credit history that you more than likely want to forget. But there’s no hiding it, this suitcase will haunt you as long as you live. Credit scores range from 300 to 850. If you have a score below 700, you may have more trouble finding a lender.

If your credit score isn’t as squeaky clean as you would like it, there are ways to boost those numbers. An obvious way to do this is to pay your bills on time. The quicker you pay off your bills and lower the balance on credit cards can benefit your score. To track your own credit score, visit with a local lender or go to myFICO.com to see were your credit score stands.

Be Realistic With What You Can Afford

The mortgage lender will pre-approve you for a certain amount to finance a home, yet this does not mean go out a buy a home at this price. You may not be able to afford it. Alongside utilities, property taxes, home insurance and possible homeowner’s fees, this price may be too high. Sit down with your family and plan out other expenses involved in owning a home, you do not want to be house poor.

Research Movement in Price

Just because the "For Sale" sign has a listing price, doesn’t mean you’re stuck at that price. Before making any type of offer, research the movement in price. Check out how many times the sale price has been reduced. If the price has been reduced multiple times, you have an eager seller. These sellers are more than likely to accept a lower offer and will want to sell quickly.

Is the Builder Reliable?

If you’re looking into new construction, look for a reputable company, one that has been in business for a few years and has a proven track record. If you are questioning your builder’s credibility, search their name on the BBB, Better Business Bureau, website to see past reviews and the rating on their business practices. When you sit down with your builder for preliminary plans, read everything. Don’t be afraid to ask questions, this is your house they are building.

What’s the School District Like?

Although the number of bedrooms and bathrooms play a very important role in making a home purchase, the school district in which this home is within is just as important. You want your kids to go to a reputable school, and this too will affect re-sale price. Do some research on these schools, kindergarten through high school, check the graduation rates and talk to people in the community. If you can’t see your children receiving a quality education, you may want to look elsewhere.

Whether buying a new home is a practical decision for you, you must do your research and think about all aspects beyond the front door. Take advantage of your realtor’s knowledge and the community. Find something that works for every member of the family and just like a book; never trust a home by its exterior.

Kasie Baltes is the Associate Editor for ManoftheHouse.com. She is a Barefoot Proximity employee.