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9 tips for homebuyers and sellers in 2009

In residential real estate, 2009 arrives much the same way that 2008 did: via a rocky road with deepening potholes. While more home buyers are swooping in and picking up great deals and sales are slowly increasing in many markets, the ongoing excess of inventory of foreclosed homes continues to depress the market.

While potential buyers are now getting very low mortgage rates, they are also facing much tighter credit standards and demands for significantly larger down-payments. And we haven't even started absorbing the financial fallout from adjustable-rate mortgages slated to ratchet up in 2009.

No one can really say quite when this downward spiral will cease. If former Fed Chairman Alan Greenspan and current Chairman Ben Bernanke were surprised by the depth of this housing crisis, who among us can accurately make the call?

There are growing sentiments out there that this darkness directly precedes a new dawn. A late-2008 consensus survey by PricewaterhouseCoopers and the Urban Land Institute, based on input from more than 600 industry experts, projects the U.S. residential market should start rebounding appreciably in 2010.

But what about now? Well, this new economy has added some new wrinkles to home-buying and home-selling strategies, while re-introducing some of those old-school favorites like sound fundamental fiscal practices. So here are nine tips for home buyers and nine for sellers to help them survive, and hopefully thrive, in the transition year of 2009.

9 tips for homebuyers in 2009

1. Cash is the new king.  If you can spare the cash, brother, it has a heck of a lot more buying clout now. In the past, we've tried to persuade people to seek out more liquid investments for their cash on hand and grab an easy-to-get, low-interest mortgage. Now, with the equity markets depressed at the same time that mortgage loans are hard to find, the tables have turned. Those wielding ready cash in a recession are always ahead of the game.

2. Negotiate extras ... and more extras.  This is a no-brainer in the current market. But while sellers continue to offer throw-ins such as built-in appliances, flat-screen TVs and even cars, the best throw-ins are always the ones that take monetary form. Think paid closing costs, a year's worth of property taxes, repair credits and paid homeowners association dues, to name only a few.

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3. Start a down-payment fund.  The goal should be to amass 20 percent. Set monthly savings goals. Shore up the family budget. Work an extra job if you have to. The pain will precede a gain: lower house payments and higher equity in the future.

 

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