Buying or Selling a Home This Year? 3 Essential Tips for Home Buyers and Sellers

(MoneyWatch)  Buying or selling a home this year? Get ready for a rough ride.

Economists and housing industry observers are saying the housing market has continued to falter in many parts of the U.S. As unemployment remains stubbornly high (10 cities in California have an official unemployment rate of 15 percent or higher), and millions of homeowners remain underwater, interest in buying homes has plummeted.

I was on Fox Chicago News yesterday morning to discuss the real estate market. The anchors asked me for three tips for buyers and three tips for sellers. Here's what I came up with:

3 Essential Home Buyer Tips:

1. Don't rush. There are loads of houses for sale in almost every market, not to mention hundreds of thousands of foreclosures and short sales. You shouldn't have to feel pressured in any way. Rushing into a deal might lead to overpaying for the property, which could have serious, long-term consequences.
2. Understand the difference between your "wants" and "needs." You may want a particular house, but with so many to choose from, what you really need to do is think about what you want from the property you're going to buy. Make a list. Check it twice. Then, think about what you absolutely have to have, that you can't live without. In my bestselling book, 100 Question Every First-Time Home Buyer Should Ask, this concept of "wants vs. needs" is so important, it's the first question in the book.
3. Know your neighborhood. It's really hard to move a house, so make sure you love the neighborhood the house is in, and not just the house itself.

Watch the FOX Chicago Video.

3 Essential Home Seller Tips:

1. Count the foreclosures in your building, on your block, and in your neighborhood. If you want to sell your home, the first thing you need to know these days is how many foreclosures (and short sales) you're competing against. If there are 20 foreclosures on your block, or if 15 people out of 100 are no longer paying their monthly assessment because they're doing a strategic default on their property, you're in real trouble - but it's far better to know that before you list the property than after.
2. Be realistic about price. Even if you're not competing against a handful of foreclosures and short sales, buyers aren't willing to pony up cash the way they did back in 2005 and 2006. Being realistic about the price point means consider exactly what has sold in the past 90 days, and for how much. Then, price your property at, or just below, that range. If you want what passes for top dollar these days, you'll have to get your home into top selling shape. And, don't forget to stage it.
3. Counter every offer. Some things are selling. The problem is, you'll never know when a home buyer is serious, because the initial bid could be super-low. It's not an insult - the home buyer could just be testing you. That's why it's vital that you counter every offer, even the ones that seem way low - if the buyer wants your property, he or she will come up to a reasonable price for the neighborhood. It just might not be the price you're hoping to get.

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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and The Equifax Personal Finance Blog, and is Chief Content Strategist at RealtyJoin.com, a community for real estate investors.