If real estate were a gambling game, then it would be correct to say that the market is wearing quite a poker face right now. There’s no doubt that sales have cooled since their red-hot highs of 2005, and there are plenty of players currently sitting out a few hands. But there are just as many betting it’ll be all aces again soon. Here are some smart real estate moves to make now – whether you plan to hold, fold or ante up in the near future.
1. Remember: All real estate is local
Just because the national real estate picture looks like it has gone cold, don’t assume it’s that way where you live. Many markets are faring just fine right now. Check www.ofheo.gov, the website of the Office of Federal Housing Enterprise Oversight, for quarterly reports on house price appreciation trends in 275 markets. Sites such as www.RealEstate.com make it easy for you to find out how much houses in your neighborhood have sold for recently.
2. Don’t be afraid to ask for the cash
The number of REALTORS® in the U.S. reached a record 1.36 million in 2006. Now that the market has slowed, consumers are holding more of the cards. Some listing agents will work for less than the traditional 3 percent, if you ask. Some buyer’s agents are even giving their clients a cut of their commission, a practice also known as “rebating.”
3. Buyer, be picky
Don’t think you can make a low-ball bid without having the seller call your bluff. Now is the time, however, to ask for a few extras. In a buyer’s market, you don’t have to accept worn hardwoods or cracked tile.
4. Don’t flip, rent
The days when you could buy a house and hit the jackpot by reselling a year later are over. Still, real estate can be a good investment, especially if you plan to rent out your property. Understand the potential pitfalls of being a landlord, though. Go to www.lendingtree.com/smartborrower/Investment-properties/What-does-it-take-to-be-a-landlord.aspx for some issues you should think about first.
5. Renovate, don’t relocate
Maybe instead of buying up, it’s time to spruce up the house you already own. But spend your remodeling money wisely, with an eye toward resale. Check Remodeling magazine’s annual Cost vs. Value report, or read about it here, for information on which projects have the best odds of paying off when you do sell.
6. Stand out in a crowded market
If you do decide to sell now, it’s especially important that your house make a good first impression. Plant some pansies, repaint the front door. Take all your REALTOR®’s advice – in spades – on increasing your curb appeal.
7. Stay right-sided
Cashing out too much of your home’s equity for cash is one bet that’s just too risky to make, high roller. If you unexpectedly have to sell in a slow market, you could find yourself upside down – owing more on your mortgage than your house is actually worth.