How to avoid overpaying in a buyer's market

DEAR BOB: My wife and I want to buy our first home, as she is expecting in about six months. However, the area where we want to buy is in a "buyer's market" with lots of homes for sale. We notice many "price reduced" hangers on the for-sale signs, so we are in no hurry to buy. The block where we almost bought a house last weekend has three houses listed for sale out of 20 houses on the block. How can we avoid paying too much? --Ned W.

DEAR NED: Before you make a written purchase offer, ask your buyer's agent to prepare a written comparative market analysis, or CMA. This is the same form that listing agents prepare for their sellers at the time a home is listed for sale.

Purchase Bob Bruss reports online.

A CMA shows recent sales (not asking) prices of nearby comparable homes, current asking prices of similar neighborhood homes, and the asking prices of recently expired comparable listings.

Then you and your buyer's agent can make value adjustments for the pros and cons of each house, compared to the house you want to buy, so you can arrive at an intelligent purchase offer price.

In a buyer's market, it is better to make a purchase offer on the low side than to offer too much. You can always come up in your offer price, but you can never come down.

Be sure your purchase offer contains contingency clauses for (a) a satisfactory lender's appraisal of the house and (b) your approval of a professional home inspector's report.

After the seller accepts your purchase offer, be certain you accompany your inspector to discuss any home defects he discovers, which could result in a price renegotiation.

(For more information on Bob Bruss publications, visit his
Real Estate Center).

Copyright 2006 Inman News