mortgage

2nd-home market offers bargains

4-step plan

Before you shop for a second home, you'll need a good plan to help you secure the best possible deal. Elements of that plan include the following:

Vacation-home deals
Before shopping for a vacation home, put the following four-step plan into place.

Research the area and get expert help. Before buying a vacation home, remember to do your homework.

"It's not like buying a shirt," says Johnson, author of the book "How to Save Thousands of Dollars on Your Home Mortgage."

"If you know a little, that means you don't know a lot."

Educate yourself about the area where you plan to buy. For example, in a market like Cape Cod, there are many different communities.

"A town on the beach will have a different feel from a town five miles from the water," Grover says.

Once you've zeroed in on the right neighborhood, Twisdale recommends investigating whether the location has growth controls to prevent the surrounding areas from becoming overdeveloped.

"Growth controls are critical for sustaining value in the long run," Twisdale says.

A real estate agent familiar with the territory can be an invaluable aide. A good agent can familiarize you with market trends and potential problems in the market.

For example, local knowledge is essential to avoid mistakes such as buying property downwind from a toxic waste dump.

Before making a bid on a vacation home, take a look at recent sales figures, Grover says.

"You have to see what sold in the last six months and what they sold for," he says. "The most recent sales will give the best sense of the neighborhood's true value."

And don't forget to research the current financing environment. Remember, buyers who fail to do their homework can end up fleeced financially, Johnson says.

"There are still lenders out there trying to see how much they can get out of your wallet, and unsophisticated buyers will get taken," he says.

Decide on whether to purchase new or used. When looking for homes, think about whether to purchase a new or existing home. Each type of home offers its own advantages and disadvantages.

Newer homes make more sense for buyers who don't want the hassle of undertaking costly renovations and repairs to older homes.

"I see value in purchasing something that is new and maintenance-free, something you don't have to worry about," says Paul Boomsma, chief marketing officer for the Leading Real Estate Companies of the World.

"This can sometimes be better than buying something with a lower monthly cost, but more expenses to maintain it. It's a convenience factor, but in today's market, convenience factors are very important."

New homes may have better insulation, newer windows and central air conditioning.

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However, older homes also have advantages. They often have more "character" than newer homes and can be found in the best locations. Older homes typically are closer to the beach than many newer homes.

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