New Normal for Home Sales: Buyers Have the Power

The American dream of homeownership is still attainable. Buyers just have to deal with a new set of realities.

In this Aug. 26, 2009 photo, realtor Scott Patterson, standing right, with Esslinger Wooten Maxwell, Inc., Realtors, shares a story during a morning meeting with other realtors at EWM in Aventura, Fla. (AP Photo/Wilfredo Lee)

(AP)

A year after the collapse of the housing market triggered the financial meltdown, lenders are demanding more money up front, high credit scores and proof of income. Paperwork must be in perfect order. Patience and persistence are required. And don't even bother asking about a subprime mortgage.

It's a vastly different set of rules from earlier this decade, when home prices soared and mortgages were easy to come by.

In some ways, it's a return to the standards that emerged as the World War II generation bought its first homes in the suburbs: Buy what you can afford. Stick to a 30-year, fixed-rate mortgage. View your home as a place to live, not as a piggy bank.

For people trying to sell their homes, the standards are different, too: Be patient and maybe even lower your asking price, because the balance of power has swung strongly to buyers.

Housing bubbles have happened before and, experts warn, could happen again. Already, home sales and prices are rising slowly, helped by tax breaks for first-time homebuyers. But real estate agents, mortgage brokers, economists and homebuyers across the country say they've noticed a shift in attitudes that they expect will last for years.

NEW REALITY: Selling your house

Real estate agent Scott Patterson hits the gas and weaves his black Mercedes-Benz across three lanes of Interstate 95 near Plantation, Fla., holding his iPhone with one hand and the steering wheel with the other.

He is rushing to meet with potential buyers of a condo with an ocean view. When he arrives, he turns on lights and opens doors in the four-bedroom place. The prospective buyers, a couple from Venezuela, walk around, ask a few questions — and leave.

Business may be up in South Florida, but the power has shifted to the buyer. And price is the key. "If you're not getting showings, you're overpriced," says Patterson, an agent with Esslinger Wooten Maxwell Realtors Inc.