Tips for Home Buyers and Sellers

April 27, 2007 — -- Sales of existing homes were down in July for the fifth month in a row, according to the National Association of Realtors, with the median home price down for the 12th straight month.

Given all the concerns over the housing market these days, the question on everyone's mind is: Is this a good time to buy or sell real estate?

If you are looking to buy, this is a great time for you.

Interest rates are still at a very low mark, there are a lot more houses available in certain areas and buyers can take their time selecting a home because places are staying on the market longer.

For sellers, it's a bit more tricky.

Some markets have seen significant drops in property value leaving homeowners with less equity than they had a few months ago.

"People need to realize that a home is where you live. It's not a lottery ticket," said Jim Gillespie, president and CEO of Coldwell Banker.

Just because the market has fallen apart in some areas, it doesn't mean that property owners are losing everything.

To help you navigate the market, here are some other tips for buyers and sellers:

Tips for Buyers

1. Be a Careful Shopper. It's a buyers market with a wide variety of choices, so don't make a hurried decision. During the housing boom if the seller had multiple offers they may have chosen to avoid a finicky shopper, but since buyers have the edge take the time to note details in the house. Do the faucets work properly? Do a full home inspection and be aware of what repairs may be needed if a purchase is made. — Lawrence Yun, an economist with the National Association of Realtors.

2. Back to School, and a New Home? While it's important to shop carefully, it might pay to make a decision in the next few months. The housing market is expected to pick up in three to six months when the uncertainty in the mortgage market settles, so the window of opportunity may not favor buyers through 2008. — Lawrence Yun, an economist with the National Association of Realtors.

3. Don't Try to Time the Market. When home prices are lower, it is very tempting for potential buyers to try to wait as long as possible in the hopes that prices will decline even further. This strategy can be detrimental. Once a home is priced to what the current market will bear, buyers will make offers. It is best to work with your sales associate to make an offer based upon the prices at which similar homes in the market are selling for. In a buyer's market, there are more opportunities for negotiations, but making an offer is an important step. If you find a house you love, put your bid in and negotiate. Don't let it sit for another buyer to make an offer. — Coldwell Bankers.

4. Take Your Time … to a Degree. The increased supply of homes on the market gives home buyers a great opportunity to evaluate a variety of properties. However, this does not mean that home buyers should procrastinate. Gauge the time you may have to choose a home by asking your sales associate how long properly priced homes are staying on the market before going into the contract stage. You may find the change in days on the market from last year is just a few days longer. — Coldwell Bankers.

5. Negotiate on the Incentives. Sellers eager to move their homes may offer you a variety of incentives such as cars, trips, clearing credit card bills for you and other deal sweeteners. If you accept an incentive, make sure it makes sense for you. Instead of having your bills paid, you may opt to have the seller renovate the master bathroom or install new flooring. Of course, you can always ask the seller to just deduct that amount from the list price. — Coldwell Bankers.

Tips for Sellers

1. Price Your Home According to the Current Market in Your Area. Just because a house comparable to yours sold for a very high price last year does not mean you will be able to realize the same price when selling your home now. Work with a full-service real estate professional to determine the appropriate, competitive listing price for your home. Remember that in this market, your sales associate may encourage a list price in accordance with other homes currently on the market, rather than those previously sold. — Coldwell Bankers

2. Be Thankful for Appreciation. While price appreciation has slowed in some markets it is important to look realistically at the financial gains you have made over the years through your home equity. — Coldwell Bankers

3. Make Your Home More Marketable. When a buyer sees your house for the first time, a critical first impression is made. If applicable, maximize curb appeal by trimming trees and planting flowers. A fresh exterior coat of paint might also prove valuable. Consider neutral colors for interior walls and carpets. Dark colors on walls, along with unnecessary clutter, make rooms look smaller. — Coldwell Bankers.

4. Consider Appliance Warranty. Consider offering an appliance warranty as an incentive so if something breaks down, a warranty company will fix or replace that stove or refrigerator without any cost to the home buyer. — Lawrence Yun, an economist with the National Association of Realtors.

5. Offer a "Seller's Contribution." A seller can sweeten the deal by offering assistance to the buyer in ways that do not require lowering the asking price. These tactics can allow your home to stand out from the crowd. They can include buying down the interest rate on the buyer's mortgage, offering to pay a portion of the buyer's closing costs and covering the buyer's mortgage payments for up to the first six months. — Coldwell Bankers.

ABC's Scott Mayerowitz contributed to this report.