Making Most Of Buyers' Market For Homes

These are trying times -- or worse -- for most people trying to sell their homes.

The market is titled decidedly toward buyers -- prices are down 20 percent or more in many areas from a year ago -- and there's no end to the freefall in sight.

So, experts agree, this is primetime for buyers.

And, says financial journalist Vera Gibbons, there's plenty they can do to assure they get bang for their buck even beyond what current market conditions indicate they should -- perhaps as much as 25-to-35 percent off the asking price!

She doled out plenty of pointers on The Early Show Monday:

While some sellers are more willing to work with buyers then they have been previously, some are still kidding themselves, hoping to get top dollar for homes that aren't in pristine condition. But many are now adjusting to the new reality that it's a tough market out there.

Buyers are getting pickier and pickier: They know they're in the driver's seat and, if a seller says 'No, thanks,' they just move on to the next property, with so many houses available.

Five things you should know about when negotiating to buy a home:

Size up the seller

Buyers need to find out as much as possible about the seller, starting with the first visit. Are they in a hurry to sell? Have they already bought another home? Are they relocating? If so, they're going to be more likely to accept a lower offer than someone who isn't, particularly if they don't have a big, outstanding mortgage on the property. If the seller owes the bank nearly the full value of the home, they are not going to be all that flexible!

Bottom line: the more informed you are as a buyer, the better you do your homework in advance, the better off you'll be in terms of negotiating, if it comes to that.

Timing is everything: Find out how long the home has been for sale

If it's been on the market a long time -- more then 90 days -- chances are, it's priced too aggressively and the seller has either rejected lowball offers (that's what comes in when an asking price is too high), or they simply haven't had any offers!

Research comparable homes

Buyers really need to know the market -- that's the key to all real estate purchases. The market is so localized that prices are going to vary from one town to next, even if the homes are similar. So, find what homes in the area are going for, what condition the house is in, how many square feet it is, when it was built, the school district is like, etc

A good Web site to go to for "comps" is Zillow.com. There are more than 80 million properties on there, with their estimated selling price. All you have to do is type in a location to find out what homes have sold for recently.

Also, just take a look around. If you see a lot of "For Sale" signs, prices are going to be competitive. The larger the inventory of unsold homes, the more leverage you have to make an offer that's 15-20 percent below the asking price.

Request other financial incentives; ask for other concessions

There are still quite a few sellers who are in denial, insisting they get their price. And if they're not willing to budge on price, try asking for other things -- buyers are requesting all sorts of things:

1) They're asking sellers to pay for closing costs.
2) They're asking for a longer escrow period or to split escrow costs.
3) If the house is in need of serious repairs, buyers are asking for cash toward fixing/renovating it.
4) Buyers are very picky, and in many cases, they are getting their way!

Never mind the listing price

All a list price is, is what the seller hopes to get. True value may not be reflected in the list price, which is why you have to do your own analysis before you make an offer. If you lowball and it's rejected, so be it. In this environment, savvy home buyers are making offers they know the seller will reject. And while they may reject an offer now, they may also accept or counter-offer down the line.

A savvy buyer is someone who's done his or her homework. They're armed with information about the area, about homes in the area, what they're going for in various neighborhoods, how much they can knock off the price for a lame kitchen, etc. They're seeing a lot of properties and have a feel for what they can, and can't, get away with in terms of offers.

When working with a real estate agent, keep in mind that, in many markets, they're desperate, and may try to sell you something you don't really want.

After seeing a home, don't contact the owner or broker to express interest. This is almost a game like dating -- when you wait a certain amount of time before calling after the first date! Agents or sellers will probably call you! Brokers are acting as desperate as sellers are. As a buyer, sit back and wait -- they'll find you, and they will pressure you. Time is on the buyer's side. Don't act too interested

All in all, a savvy buyer does his or her homework. They're armed with information about the area, about homes in the area, what they're going for in various neighborhoods, how much they can knock off the price for a lame kitchen, etc. They see a lot of properties and have a feel for what they can, and can't, get away with in terms of offers.