Silver Lining For Home Buyers

(CBS)  Our new series, "How Low Can You Go" begins with the hard-hit housing market. But there's a silver lining in this dark economic cloud. There are some great deals out there.

The Early Show Saturday Edition co-anchor Chris Wragge, highlighted three people from around the country who received very low prices on their homes because of the economy.

Brian Donaldson recently bought a house for $740,000 that was appraised for $1.2 million last year.

Kim D., a college student, just recently paid $67,000 for a house that appraised for $109,000.

Christina Shane, her husband Jeremy and daughter Caitlin moved into a house that the previous owners bought for $211,000. It was later foreclosed on and because of the economy, they were able to get it for $133,000. The Shane's were very excited to get such a great deal on their first home.

Early Show financial contributor Vera Gibbons pointed out the very best bargains in real estate.

"So, I guess it is safe to say it is a buyer's market?" Wragge asked.

"It definitely is. There's some really good bargains out there, values down about 30 percent from their peaks in 2006, mortgage rates are nice and low, five percent for a 30-year fixed. However, values, while they may be down 30 percent, they could go down another 15 percent, 20 percent this year. If you want to make a quick buck, that's not for you. If you're thinking long term, you plan on staying in a house at least five to seven years, can make the numbers work, you've got good credit, you can do the down payment, you're not worried about job security. It's your market," Gibbons said.

Some of the best bargains can be found in states like California, Nevada, Arizona and Florida.

"You're talking upwards of 30 percent, 35 percent in areas like Phoenix, a lot of the Florida markets, Miami, Las Vegas are very weak right now. San Francisco, San Diego, Los Angeles, really good deals in these areas. If you look at Michigan, a state like that because of the auto sector, Detroit is tanking as well," Gibbons said.

Gibbons offered some tips for buyers.

"You really have to know the seller. 'Are they desperate to sell? Have they lost their job? Getting a divorce? Are they relocating?' The more you know about the seller, the more power you have to negotiate if it actually comes to that.

"How long the house has been on the market is key as well, as to what the seller's all about. If it's been sitting there indefinitely, then that maybe tells you it's overpriced, priced too aggressively. Or maybe the seller has been getting low-ball offers and they're not interested, not a distressed seller," Gibbons said.

There are some other key factors to consider.

"Right, you have to know exactly what homes are going for in your area, comparable sales, comparable in terms of size, age, location. This is where sites like trulia.com can come in handy, you can do a side-by-side comparison, find out how much homes are going for, how much they're discounted by. Here's the thing. If you find that homes in the area you're interested in are going for about five percent below asking, and you find a home you like, why not go in and offer eight to 10 percent below asking, just to get the ball rolling," Gibbons said.

"That's the key, don't focus on the list price?" Wragge aked.

"No. This is what the seller is actually hoping to get, may not reflect the true value here. So, you have to do your homework in advance. Do your own analysis before you make any kind of offer in this market," Gibbons said.

[tmittelstaed]

It's also a great time to refinance - we just refinanced out of a 6.8% loan into a 4.8%

[sjc_1]

Housing is returning to the price levels that were there before the bubble. It was the "Ownership Society" that Bush so lamely introduced that set the starting point for the greed and irresponsibility. Now that houses are returning to 2000 levels, people might be able to buy if they have a lot to put down and can get a loan.

[SusanStoHelit]

It's a great time to buy - I just bought a house. It cost half of what it sold for last, it's a gorgeous house in great shape, not a fixer at all, and the low purchase price we had also lowers our property taxes a ton.

I love this market! And, of course, this is our new family home, not some investment.

[pepperwood2]

This is GOOD News. That means that My Home Owners Insurance will be lower as Hartford will be dropping the appraised value of my Cabin thus lowering the costs of my Insurance.

Who's been saying that buying your own home is not the American Scheme or something like that? So Sad but this is what business has been all about on Wall & State Street.

A group called Wall Street Watch is out with a report that finds that ?Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.7 billion in political contributions and spent another $3.4 billion on lobbyists?.

The report, "Sold Out: How Wall Street and Washington Betrayed America," concludes that the contributions were ?aimed at undercutting federal regulation? and ultimately ?led directly to the current financial collapse.?