Won't lose money if I buy a house now, before the market "hits bottom?"

Certainly no one can say for sure what home prices will be 6 months, 1 year or 2 years from now. You can listen to 5 different industry pundits and hear 5 different predictions. So what do you do if you want to buy a home?

First you have to look at WHY you are buying. If you want to buy a property with the thought of turning around and “flipping” it in a year or so to make a huge profit as people were doing in the early 2000s - forget it. Until the available inventory of homes for sale starts to drop and prices start to rise, you are not likely to make any short term gains.

The one thing that is generally agreed upon is that at some point, the market will, as it always does, hit a bottom level and then prices will begin to rise again. When that will be and how quickly the prices will go up is impossible for anyone to say.

If you are buying a home for your family and are looking for a place to enjoy life, liberty and the pursuit of happiness, you have to look at how you’re living now and ask yourself if you want to continue as you are or is moving something that will improve the lifestyle of you and your loved ones. If it’s important to move, then don’t be afraid of buying. Real estate is considered by many to be an investment- and that's fine - but let's not the forget the primary reason that we even build houses - to live in!

Take your time. Educate yourself on what areas you’d like to live in, what type of home you need and what kind of financial situation you’re in. In other words how much money will you be able to contribute in the form of a down payment and how much of a mortgage can you get approved for?

Once you know where you want to live and how much you should spend, start looking at specific houses with a Realtor. Find the house that makes you and your family feel like you are “coming home” the first time you walk into it. These houses are out there for sale – right now. There are many more choices today than there were over the last few years.

So unless you’re investing for the sake of investing – don’t be deterred by the market. Find the home out there that is calling you and buy it.

I don't need a broker to sell my house, do I?

People do it every day. So the answer is, obviously, no - you do not NEED a broker. So the underlying questions are

1. What are the advantages?
2. What are the disadvantages?

The advantages really are twofold. First, you don't have to pay a fee. The entire sale price of your home is yours. Secondly, many people feel they have more control over the situation, they can set their asking price based on what they want, they don't have a lock box on their door which allows them to control the access to prospects instead of giving access to agents from all over the county.

There are some potential disadvantages - here's what they are.

1. Marketing. Most "For Sale By Owners" advertise by putting a sign in their yard. This works well if your potential buyer happens to drive by your house. If you think about it, this is an incredibly limited way of exposing your home for sale. Unless you live on a main road or highway, the same cars usually drive by your house again and again. Within a few days, it's likely that everyone who is going to see your sign, will have seen it.

The second form of advertising is to post your home on a website that is specifically for the "For Sale By Owner" market. There are a number of these sites. This gives you a little bit broader exposure than the sign but it is still very limited. Think about it. People who are looking to purchase a home are not likely to really care about whether or not the seller is paying a real estate fee. They simply want to buy a home. Most buyers go to real estate agents.

Realtors all have (to varying degrees) structured advertising and marketing plans for all the homes they list. In looking for a Realtor, make sure to ask about the marketing plan - it is the most important component in how they can help you. You can find out about the Coldwell Banker marketing plan by contacting me -- it's the most comprehensive plan out there. There's a lot to advertising and marketing a home -- way more than a sign, a newspaper ad and Internet listing.

2. Qualifying your buyers. If you should happen to get a prospective buyer, who calls after seeing your sign or seeing your listing on the Internet, you will, likely invite them to preview your home and perhaps even make you an offer without having any knowledge of their financial situation and their ability to actually get a mortgage. A reputable Realtor will have worked with the prospect in advance of showing them homes. This provides a much higher probability that the people who are viewing your home are capable of actually making the purchase.

3. Setting the price. When you are setting the asking price for you home, what are you basing it on? It's a fairly complex process. Realtors have tools and experience to help you set the price correct. The danger is that if you set it too high no one will be interested in making you an offer and if you price it too low, you risk not getting as much for your home as you possibly could.

4. Getting the highest price possible for your home. Aside from the asking price, you also have to be concerned with the final price that you settle on if and when you do get a buyer. When selling it by yourself, you are likely to be dealing with a single prospect. The negotiating scenario is the typical back and forth, where the buyer offers a low price, you come down a little, he comes up a little and eventually you meet somewhere in the middle.

When working through a realtor, if your house is priced and marketed correctly, there is an increased likelihood that there will be multiple prospects interested in your house. There's no guarantee that you'll have multiple offers, but the increased exposure and marketing increases the chances. When your Realtor does receive multiple offers, the negotiating mode changes from a back and forth scenario to an "auction" environment. This is where the multiple buyers each put forth their highest and best offer, always keeping in mind that if they bid too low, they will not "win" the house. This type of negotiation will make you comfortable that you got the best possible price and didn't "leave any money on the table".

The bottom line is that while in some cases it may seem at the outset that you'll save money by selling yourself, you have to consider the "net equity" of your sale. In other words ask yourself the following question: "If I save 6% in commission but get 7% less for my home, what did I save?"