By Jean Chatzky with Arielle McGowen
January 16, 2010
The real estate market is under heavy scrutiny right now from both sides of the line. People who eventually want to own a home—it's the American dream, after all—are wondering if now's the time to make that leap, particularly with the first-time homebuyer's credit up for grabs until April 30. Homeowners who want to sell are wondering what price and features are going to give their house the push it needs.
The fact is, it's a tricky market to navigate, no matter what side you're on. Here, some tips for making the best of the situation.
If you're a potential buyer:
Hone in on your needs. There are a lot of deals out there, that's for sure. But the trick here is to keep from getting sucked into a home simply because it's on sale. Before you start shopping, sit down and make a list. "Jot down what you really need, so you have a checklist that shows your needs versus your wants," says Peter A. Schkeeper, one of the authors of The Smart Consumer's Guide to Home Buying. Take that list with you to each home, and make sure you're not compromising—there are plenty of houses out there, so you can afford to be a bit picky. It might help to bring a camera along so you can snap shots of anything that you really love or things you're not so sure about it. Your memory may not serve you as well as you'd hoped later on, and a photograph will tell you if that pea green carpeting was really as bad as it seemed.
Focus on the location. You have to love the house. But the location is just as important (if not more—particularly when it comes time to sell, location is going to be a huge factor). "Buying a house is a romantic journey. When you're young, your mother tells you to date more than one person, make sure you meet the family. When it comes to a home, it's the same thing. The economy may be improving, and the value of that particular home may be terrific, but if the area is under a lot of economic stress, the location can be detrimental," Schkeeper says. So do your research. That means talking to people in the neighborhood, spending a little time there, going around to businesses to see if they're thriving and reading the local newspapers. The Internet is, of course, a great resource as well.
Be wary of new construction. That doesn't mean that all new developments or condos are bad news. But some certainly are. "There are issues right now with developers who are only marginally capitalized. In the housing crisis, they got caught with their pants down, and the development isn't anywhere finished. People who bought in are left with a new home, but a developer who can't stand behind the warranty or unfinished streets," says Ilyce Glink, author of 100 Questions Every First-Time Home Buyer Should Ask, now in its third edition. The takeaway? Be cautions about buying into a development or condo that isn't at least 70 percent sold, says Glink, and do your due diligence to find out who the developer is, the company's history and whether the project is in good shape financially.
Stand out from the crowd. Easier said than done, I know, but what's going to make your home the shining star in the neighborhood is careful attention to detail. I'm not talking about a gut renovation, but fixer-uppers aren't really moving these days, and that's because buyers aren't looking to buy a project any more. "Make sure your home is freshly painted, the appliances are all in working order and everything, inside and outside, is spotlessly clean," Link says. Remember that the first impression is on the outside, so make sure the lawn is mowed, the exterior is painted and the flower beds are weeded and blooming. For more staging ideas, check out the videos on Glink's website, ExpertRealEstateTips.net.
Price it right. You may think your home is worth more than the one next door, but unless you have an extra bedroom or extensive renovations, buyers are unlikely to see the difference. Take a trip around the neighborhood, see what sellers with similar homes are asking and set your price accordingly. Sellers have a tendency to overprice homes because their emotions get in the way. But sentimental value doesn't translate to a potential buyer, and if you price your home too high, you might close the door on homebuyers before they ever have a chance to walk through it. A good real estate agent can help you settle on the right number.
Take matters into your own hands. It takes some extra effort to move a home these days, and that means using all the resources you have available. I'm talking about Twitter, Facebook and your blog, of course. "Do your own social networking and marketing. Twitter about how great it is to live in your neighborhood, put pictures of the home on your Facebook page, make a website with photos and a video about how great your house is," Glink says. Spread the word to your friends too, because as much as our lives are electronic these days, there's nothing like good, old-fashioned word of mouth.