Where's the beef in this buyer's market?

Question: Hey, I thought this was a buyer's market? My fiance and I have a great, stable jobs with strong income and $50,000 to put down in cash. We will be getting married soon. We've been trying to buy an entry level house for $350,000 in the Greater NYC area for over a year. I have looked at over 60 homes and made offers on a few but none have been accepted. I still think prices in this market are too high. What gives? Signed, Frustrated

Dear Frustrated:

Statistics tell the story of what is happening in your market. While many in the media focus on by how much prices have decliined and how much below the sellers asking price you can offer, you need to be focused on how much inventory exists in the segment of the market in which you are bidding. If you simply ask your agent, I'm sure he or she can provide you with that. There is more inventory in the upper price ranges of the market than at the entry level, where you are, which explains why it may not feel like such a buyer's market to you. You're not the only one, believe me. Most of the activity in the area where a commute to NYC is accessible is from first time buyers who are focused on the entry level price ranges, bringing inventory down to an almost 'balanced market' levels of 6 months or less in some areas.

Real estate laws vary by state, but your buyer agent should be the one charged with finding your home, listed on the MLS or otherwise, so that you get the benefit of professional counsel, pricing advice, etc. on each home you consider for purchase. This market can be tricky because prices in all areas aren't necessarily coming down in a nice clean 10-20% linear fashion. You need an agent who knows prices in your market and can provide you with an opinion of value on homes you're bidding on. A "cheap" bank foreclosure can quickly turn out to be not so cheap when the cost of repairs is added to the bill.

You also need to realize that if you're looking for a deal, like everyone is, you need to be wiling to buy when no one else is. For example, if homes in your price range are attracting 20 people at an open house, then there may be too much traffic chasing too many homes (further evidence of my comment above on inventory). Make sure you have your pre-approval and financial house in order. Be sure to work with an experienced lender who can help you understand how the many recent changes in underwriting criteria may affect your specific situation. Know your numbers, keep saving more money, and do everything you can to continue to prepare yourself as much as possible.

Your agent should be able to give you basic insight into the seller's motivation before you even walk into the house and can counsel you on potential negotiating strategies. You should be looking to purchase from motivated sellers if you are "looking for a great deal".

Good luck!! Be patient and stick with it!!