Buying A Home In The Credit Crunch

(CBS)  Iovana Posada is a hot commodity in an otherwise cold housing market. She's a prospective home buyer shopping for a deal, CBS News correspondent Kelly Cobiella asked.

"How long have you been looking?" Cobiella asked.

"Right now, about six months," Posada said. "I'm purely looking at the numbers, the budget, the property, the price, if it interests me, so I'm waiting out for an eager seller."

All signs point to a buyer's market. From coast to coast, the cost of a home has remained flat or dropped more than 25 percent in the past year, with some of the sharpest declines in California, Florida and Nevada.

"Buying low doesn't necessarily mean you're getting a great deal," said Manuel Iraola, who founded Homekeys.net. "It just means you're buying low."

Iraola is the founder and CEO of a Web site that helps weed out the bad buys. He says there are smart ways to find a good home and an eager seller.

First, do your homework.

"What did the last owner pay for that property, and when did that transaction take place? If someone bought post-2005, there's a more than 50-50 chance that's a seller in distress," he said.

Check the rest of the neighborhood for historical home values - and today's prices. The home Posada saw is listed at $589,000. The neighbors across the street and down the block are asking for more than $100,000 less.

"So if you are a buyer, you owe it to yourself to take a look," Iraola said.

Second, don't worry about waiting for the bottom. What goes down will go up over time.

"If you plan to live in a property three to five years, you are OK," Iraola said. "If you're thinking of speculating and flipping in the next 18 months, I don't think that's a wise decision."

Third, get pre-approved for a loan before you look. It's a buyer's market, not a borrower's market.

You'll need a high credit score, low debt, a steady job and proof of income, plus at least 10 percent down.

Even with nearly perfect credit, Posada's bank required 20 percent down for pre-approval.

"What a fantastic view!" Posada said.

She's made an offer on a condo, but she's ready to walk away from a deal that isn't perfect - even if the view is.