This spring is sure to bring a home-buyer's paradise
By Pat Curry • Bankrate.com

In the spring of 2000, house hunters felt like just that -- hunters, in search of an elusive prey.

Stories abounded of bidding wars. Houses sold the day they were listed for more than the asking price. Real estate agents told their sellers not to bother spending money on fixing up their homes to attract buyers -- it just wasn't necessary. Buyers were told not to even think of making a contingency offer.

What a difference a year makes.

This year, as we enter the busiest home-buying season of the year, house hunters are hearing perhaps the sweetest four words they could hope for: It's a buyer's market.

"After eight years of being in the cellar of the ship, buyers are in the captain's seat," says Brad Inman, CEO of HomeGain.com, a Net-based real estate services company. "In addition to having low interest rates, they can be far more patient, diligent, have more inventory to look at, ask the seller to do more and command a good deal. That's the big market picture that's unfolding."

The season for sales
When the daffodils and irises bloom and the trees begin to bud, everything looks right with the world. The holidays are behind us. If there are kids to consider, this will be the time that families start the home-buying process, so they can finish out the school year at one place and make a fresh start in the fall.

Some buyers use their income tax refunds toward the down payment on a house, which generally means shopping starts after April 15. For all these reasons and more, spring and early summer have always been the peak of the residential real estate market.

Last year, new-home sales topped out in March, with 92,000 homes sold, according to data from the Commerce Department's Bureau of the Census. For existing-home sales, March marked the month when sales began to climb, according to research from the National Association of Realtors, which tracks the market. February sales were at 306,000, jumping to 413,000 in March and peaking at 539,000 homes sold in June.

If the past is any indicator, we'll see the same kind of sales this year. Only this year, it's the buyers who have the bargaining power. With the softening economy, Inman says home sellers won't hold out for the red-hot prices they were demanding -- and getting -- during the past two years. Buyers should also see sellers putting more money and elbow grease into fixing up a home before a sale.

Plus, buyers should have the luxury of time to do a thorough job of researching the market and individual properties they're considering, says Doug Perry, first vice president, consumer markets division, Countrywide Home Loans, Calabasas, Calif.

"As a buyer, the slower pace is better," he says. "In a fast-paced seller's market, you barely have time to check out the house."

Buyers may also be able to put a contingency offer on a house, with the contract based on the sale of their own homes.

The new-home market shows similar promise.

Fresh flowers, fresh houses
David Weekley, CEO of Houston-based David Weekley Homes, noted that many builders start homes in the fall for this selling season.

"Builders have fresh inventory out there," he says. "There's a good selection of homes."

But before buyers sit down with a real estate agent or a builder, they need to spend some time chatting with a lender.

"First, check out the financing and then go look for a house," Perry says. "Looking for a house is a stressful process and then finding out the payment isn't doable is setting yourself up for a big disappointment and potential financial loss. A lot of sellers won't even accept a contract without pre-qualification or a pre-approval letter from a lender."

A buyer who is pre-qualified has given his lender financial information, including a list of his income and debts. A pre-approval letter means that the information has been verified and a buyer is approved for a loan of a certain amount.

Going through the numbers with a lender ahead of time shouldn't cost a buyer anything and will provide solid information on what they can afford, particularly if a buyer can actually qualify for more debt than they want to take on.

"You should never make a purchase offer without first making sure you can get the loan," Perry says, "and getting payments you feel comfortable with."