Location.  Identify traffic patterns, commercial businesses, and schools near the home you are interested in to make sure that they are agreeable to you.  Although purchasing a home that is in a high traffic area can potentially save money as homes in such areas are usually less than homes on quiet streets, it will have an impact on the value of the home when you sell it.  Regarding commercial businesses near the home, look for business that are quiet and have normal operating hours.

Sloping Floors.  Be cautious of homes that have sloping floors as that is an indicator of some sort of structural problem or a settling issue.  Both of these types of problems can be corrected, but usually at a high cost.  It is best to have a structural engineer inspect the home and provide you with their assessment.

"AS IS" Properties.  "AS IS" is a real estate term that is used in the description of the property.  The definition of it is that the owner of the home being sold will not make any repairs or corrections to it.  AS IS properties are a red flag for home buyers who want to move into a home that is "move-in-ready" and requires little or not repairs prior to moving in.  AS IS homes usually are either run down, out dated, or in need of some sort of repair.

Bank Owned Properties.  If the home you are interested in is owned by a bank or a foreclosed on home, it is best to hire a buyer's agent who is a specialist in dealing with foreclosures.  The process for purchasing these homes is different than purchasing from an owner-occupant, so it is critical you have an expert working on your behalf.

Short Sale Properties.  A short sale is when the owner of the home is negotiating with their mortgage holder to take less than what is owed on the home as payment in full.  Again, like bank owned properties, homes that are sold as a short sale follow a different process than a normal real estate transaction, so it is best to hire a buyer's agent who specializes in managing short sale transactions. 

By understanding what to look for as a red flag, you will be able to make a confident choice in homes.  Use the internet to seek out additional red flags, such as these sites: 10 biggest home-buying mistakes and Buying A House: Some More Problems To Watch Out For. 

The first step in saving money is to create a monthly budget of income and expenses.  In order to save, create a budget "line item" titled "HOUSE DOWN PAYMENT."  If possible, save a certain percentage out of every pay check or invoice, such as 10 or 20 percent.  Contact your employer to have the percentage automatically deposited into a special savings account and it will occur consistently.

A fun article to read is:  How to Save Money Every Month.  It recommends some unique, creative ways to save money on a monthly basis.  Utilize the budget to track additional savings so that the extra money will be identified and placed into the down payment savings fund.

Learn about first time homebuyer assistance programs, such as HUDs American Dream Down payment Initiative, so that you will have a good understanding of exactly how much of a down payment you will need.  Contact and meet with a mortgage lender as they are experts in loan programs and down payment assistance programs.

Jump off the merry-go-round of renting and paying someone else's mortgage.  Set a budget, save money for a down payment, learn about loan programs that are available so you fully comprehend how much money is necessary to acquire.  By setting up a plan of action, home ownership will soon be a reality.

A good place to start gathering information on the real estate market is to look at statistics.  For example, this website, Housing & Economic Indicators, was established by the National Association of Realtors to disseminate statistical data on the housing market so that realtors and consumers could be educated on real estate indicators.  You may want to study this information and discuss it with your buyer's agent.

A buyer's agent is a realtor who specifically helps people who want to purchase a home.  They are an invaluable asset when it comes to buying a home.  A buyer's agent will assist in answering your questions, educating you on options, and developing a strategic plan of action for helping you determine when a good time to buy is.  After meeting with a buyer's agent, they may recommend you wait to purchase based off of what you want, how much money you have, and how much of a loan you can be approved for. 

There are always good homes at affordable prices.  The most important issue when determining whether or not it is a good time to buy a home is understanding your own budget and purchasing within your means.  For additional information this website will help you, and your buyer's agent, answer this question in more detail:  Should Your Buy a Home Right Now?

Some of the key factors that play a role in determining value are:  location of the property, the condition of the home, the age and size of the home.  For example:  There are two homes, Property A and Property B, that have the same floor plan.  Property A is located on a busy intersection, is a foreclosed home that needs a lot of repair, is 20 years old, and is on a small lot.  Property B is located on a cul-de-sac, is owned by the original owner, is 15 years old, and has a large, level lot.  Property A is valued at $200,000, and Property B is valued at $350,000.  Property A might be better for an investor who wants to make their own repairs and then rent the home out rather than an inexperienced, new home owner. 

When a real estate agent is hired as a buyer's agent, the agent will be able to assist the buyer in determining a price to offer on a home.  The agent is most likely a member of their local Multiple Listing Service (MLS), which is a database of housing statistics for a given area.  The MLS is a place where realtors share information on properties, such as how much a home sells for, how long it is/was on the market, etc.  The realtor will analyze data around the home the buyer is interested in, compare it to the price the seller is asking, and make a recommendation to the buyer.  A good example of the data on an MLS is:   San Diego Real Estate.  This link is provided by the National Association of Realtors and is directly connected to the San Diego, California MLS system to upload data.  Like all MLS organizations, some data is not shared with non-members, such as sales history, pricing and the number of days the home has been on the market.

Another way to determine a home's value is by hiring a professional appraiser.  Some sellers will have an appraisal conducted on their home prior to putting it on the market.  This way they have a good idea as to how much they can expect.  If a seller hires a realtor, the realtor will also provide their recommendation.  Both the appraiser and the realtor utilize the same resource for their data, which is the MLS.  To learn more about appraisers, go to Appraisal Institute - Homepage.

The economic rule that applies in determining home values is the law of supply and demand.  For example, a home is purchased for $500,000 during a period when there were a lot of people buying homes and not a lot of people selling them.  Two 2 years later the owner has to relocate and has to sell it.  There no longer is a high demand for homes and therefore there are a lot of homes on the market, so it will only sell for $400,000.  The homeowner did not make a mistake two years ago; it's just that the market changed.

When determining home prices, be sure to take into consideration the location, condition, age and size of the home.  Contact a professional real estate agent and utilize their services and knowledge to accurately translate the MLS data into solid facts.  Lastly, be aware of the overall economic conditions that play a role in home values.

1.  Keep all exposed wood scraped, caulked and painted. Exposed wood rots easily and can cause hidden damage behind soffits and siding. Be sure to compliment the home by choosing good paint that is neutral in color.

2.  Inspect water drainage on a regular basis around the foundation of the home. The biggest and one of the most expensive problems a home can have is poor drainage. It is best to have a good gutter system on the home so that rain water can run off effectively and be moved away from the foundation of the home. Water that drains near the foundation causes pressure on it and will most likely result in foundation problems. For additional information on keeping your foundation in good condition, go to this helpful article: 9 Tips for Maintaining a Home's Foundation

3.  Add complimentary, easy to maintain, landscaping to the yard. It is a good idea to plant trees that flank the home instead of placing them directly in the middle. By flanking them, the home appears larger. You could also use landscaping stones to create curving lines that flatter the lines of the home.

4.  Bathrooms and kitchens are the two most expensive rooms to update in a home, but they add the most value to a home. Simple upgrades can be made over time, such as replacing vinyl flooring with ceramic tile, refinishing or replacing the cabinets, or putting in a more modern countertop and/or sink.

5.  By updating light and faucet fixtures, a room can have the appearance of being remodeled with a minimum of expense. Again, over a period of time, outdated fixtures can be replaced with newer, more modern looking ones. Be sure to have the light fixtures match so that they aesthetically add appeal to each room yet do not detract from the room.

Keep your home's value high by creating a maintenance and upgrade schedule. Over time you will have a new, fresh look to your home. This way you will not be overburdened when it comes time to sell your home. For helpful information on how to keep your home value high, see the National Association of Home Builders website.

The most popular use of the internet to aide in purchasing a home is to search for homes.  There are many websites that provide home buyers access to properties that are currently for sale in any given area.  These home search tools allow buyers to "shop" for homes at their own convenience.  With busy schedules, it can be difficult to tour homes in person, and in the case of buyers who are relocating, it is almost impossible.  Home search sites, such as California Real Estate and Home Search, make it simple for the buyer to search areas in a community by price, house style, number of bedrooms, etc. 

A by-product of using the internet to search for homes is that the buyer becomes knowledgeable of current home values.  It is important to consult a real estate professional regarding actual "sold" values (the price that a home sells for, which is the true current value of a home) as well as how long the home has been on the market.  These factors play a critical role in what an appropriate offer price would be to acquire the home.  Find Home Values is a good website to use to learn about general home value statistics in an area.

Real estate agents can be found on the internet through local, state and national realtor organizations, such as Realtor.com.  In addition to finding a realtor, the internet can be used to investigate their background, learn about their company, and review feedback from previous clients.  You can also search for agents with a quality guarantee, thereby seeking out agents with the best track record.

Basic information on mortgages can also be found on the internet, allowing buyers to learn and prepare for the loan approval process.  Most lenders will have their own websites and allow for application to be made through the site.  If buyers are simply learning what they can afford, there are tools such as Financial Calculators - Mortgage Calculators to plug in their information and receive a snapshot.

By becoming familiar with what homes are available within given price ranges, homebuyers are much more knowledgeable about what their money can purchase.  This first hand knowledge gives the buyer the ability to relax as unknown factors are now at their fingertips.

First it is important to comprehend the fact that even before you begin to look at homes in person;  you have already been doing all of the pre-purchase planning and actions.  These include:

• Searching and viewing homes on the internet:  This activity provides you with a working knowledge of what properties are on the market, what locations you identify with, and what asking prices are.
• Consulting and hiring a buyer ‘s agent:  The agent will ask you many questions to help you define exactly what type of home you want, how much you want to spend, what location, amenities desired, special needs and wants, etc.  In addition, the buyer agent will define expectations for you in regard to the steps involved in the home purchase process, eliminating stress of the unknown.
• Meeting with a mortgage lender:  The loan pre-approval process will occur prior to physically looking at homes with the buyer agent.  This is a critical step as it answers one of the most stressful questions in the home buying process, which is, "How much of a home can I afford?"  The mortgage lender, or loan officer, will review your financial history, taxes, and other necessary documentation, and ascertain how much you can borrow. 

By the time you actually tour properties, you will be extremely comfortable with the process and will have done your due diligence so that making the final decision on a home will be an easy, confident one.  Because you have done all of your research, worked through the financial step, and consulted a professional to manage the details, you will know when the home is right for you. 

A few fun websites to peruse are:

• Feng Shui Tips: What To Look for Before Buying a Home
• Ten Ways to Know You Found the Right House for You

Pitfalls to Avoid

§         Purchasing a "fixer-upper:"  The problem with purchasing a fixer-upper is that your vacation now has turned into a working vacation if you plan on doing the repairs and/or remodeling on your own.  If you hire someone to do it, it adds cost and takes time to ensure the work is being completed properly.

§         Not visiting the area several times prior to making a purchase.  If you visit an area once or twice and think you would like to purchase a vacation home there, it would be best to schedule several other visits at different times of the year.  This way you ensure that you like it all year round.  It is also a good idea to research the local school district, the chamber of commerce, etc., to learn about the community.

§         Purchasing a vacation home where you do not want to retire.  The best scenario for purchasing a vacation home is to purchase one in an area you want to retire.  That way you can use the home as a vacation home while working, and then simply relocate there once you are ready to retire.  In addition, there are tax benefits to this situation.

§         Not understanding the full benefits and pitfalls to managing the taxes on a vacation home.  An excellent website to study is:  Specific Tax Implications Associated With Purchasing a Vacation Home.

Advantages

§         Rental opportunities abound with owning a vacation home.  Leasing out your vacation home allows you to have someone else make the payment on it, as well as provides you with tax deductions (see the above Tax Implications link).

§         You will be able to stock the home with supplies necessary for your vacation, making it unnecessary to tote them back and forth.  This includes a second car, kitchenware, clothing, sporting equipment, etc.

§         By visiting the community several times, even over a period of years, you will establish friendships, making it an easy transition to eventually live in the area full time.

In addition, contact a buyer's agent in the area to consult with regarding your ideas and plans.  They will be able to assist and guide you, even if you are not ready to make a purchase immediately.  They will be a tremendous resource to you as you become educated on the community during your visits.

If you would like more information, a good book to review prior to purchasing a vacation home is:  http://www.amazon.com/Second-Homes-Dummies-Bridget-McCrea/dp/0470105224. 

Compromise #1:  When negotiating price, offer a realistic price based on factual data.  If the seller counteroffers your first offer with a higher offer, a good compromise is to meet them half way.  For example:   

The list price on the home is $750,000.  Based on the data your realtor has provided you, you make an offer of $650,000.  The seller counter offers with a price of $725,000.  A half way price would be $687,500 – half way between your offer and their counteroffer.

A good buyer agent, and seller agent, will be aware of this type of compromise and understand that it is a win-win tactic.  Of course the "half way" price must be no higher than what your buyer agent recommends as a fair, current market value for the home.

Compromise #2:  One of the items that are negotiable in a real estate purchase is the closing and possession date, or dates.  They differ in that the closing date is the date the final contract and mortgage documents are signed – it is the date that escrow closes, and the possession date is the date the buyer legally possesses the home and can move in.  In many cases, the buyer and the seller will want to move over a weekend, usually the same weekend.  A compromise is to "split the weekend."  For example:

Closing date is scheduled for Friday and possession is on Sunday.

This gives the seller Friday and Saturday to move out and clean the home, and provides the buyer with Sunday to move in.

Compromise #3:  Once all terms in the initial contract are agreed upon, the buyer then conducts a home inspection.  In almost all cases, there are unacceptable conditions, but be smart about which ones to negotiate.  If the unacceptable conditions are miniscule, then forego requesting seller repairs.  A smart compromise is to ask only for repairs on unacceptable items that are related to safety issues, mechanical issues (plumbing, etc.), and structural issues (the foundation of the home, the exterior, the roof).

Be smart when negotiating a home by making smart compromises with the seller.  Learn what it takes to get the home you want without giving up too much and by giving in some.  The Real Estate Negotiation Institute has some helpful recommendations when negotiating, as well as this article from REALTOR.com: Negotiating to Yes. 

To learn what is currently happening in the real estate market, schedule a meeting with a trusted real estate agent.  Let the agent know you want to discuss what has been happening in the last six months in the area your home is located, or if buying, the area you want to purchase.  The realtor will provide you with statistics and data on properties that have sold, including the sale prices, how long the homes were on the market, and any financing issues, i.e., type of loan, whether or not it was a foreclosure or short sale.  What this information will give you is a thorough understanding of whether it is a "buyers" market or a "sellers" market.

The former, a buyers market, is when the market has more properties available for sale than there is demand for them, resulting in lower prices and better opportunity for buyers to pay less for homes than in the recent past.  The latter, a sellers market, is the opposite – there are fewer homes on the market, thereby resulting in buyers having to pay more for a property than in the recent past.  The realtor will be able to interpret the data of the past six months and help guide you to take action now or not.

Meeting with a lender will provide you with an understanding of what is happening in the financial industry.  If purchasing a home, the lender will educate you on loan availability, interest rates, loan types, and how much they will lend you.  If selling a home, it is still a good idea to speak with a lender so you can understand what types of loans buyers may present to you as part of their offer to purchase.  This is important because some loans require the seller to pay a portion of the buyer's closing costs and a complete understanding of why a seller would want to do this is imperative.  It will assist you in how to negotiate if a buyer comes to you with such a loan.

Researching on the internet provides you with supportive background on the above.  There are several sites designed to make market information available, disseminating asking price, location and condition of properties.  For specific metropolitan areas, use this National Association of Realtors (NAR) data site to review the most recent sales and pending homes information:  Metropolitan Median Prices.

NAR releases housing statistics on a regular basis.  To keep on top of what is happening nationwide and in specific areas, print this release calendar to ensure that you know when to check the statistics:  Statistical & Forecast News Release Schedule.  This can give you and your realtor a jump on competition.

Use these tools to determine how to time the real estate market so as to best know when to take action to buy or sell a home.  Consult a realtor, meet with a lender, and do additional supportive research on the internet.