Have you noticed what's happing in the home-sales market? The number of sales is dropping, but prices in haven't declined much. Only highly motivated sellers who must sell seem to be dropping asking price.
Unfortunately, there is no reliable yardstick to determine if home-sales prices are on a plateau or if they might be dropping a bit in some price ranges. The median sales price means an equal number of homes sold above and below that amount. If more less-expensive homes sell, the median drops. If the number of expensive home sales increases, the median sales price rises.
Average home-sales prices are no better indicators of rising or falling prices. The average home price is simply the number of sales divided onto the total sales prices in a community.
Ironically during this time of steady or declining home-sales prices, mortgage interest rates have been dropping. Usually when mortgage interest rates fall, home prices rise (because buyers demand increases), but home prices clearly are not rising.
The result is an ideal "buyer's market" with low interest rates and stable home prices. A buyer's market means there are more homes for sale than there are qualified buyers.
Only the smartest buyers will purchase now to take advantage of the current market conditions, with an abundant supply of homes for sale and remarkably low mortgage interest rates. Here's how buyers can benefit.
-- Get preapproved for a home mortgage. Although home loan lenders are busy with a record volume of refinancing, they still have time to get buyers preapproved in writing by the actual lender. Borrowers should realize so-called prequalification is worthless.
By having a lender's preapproval letter or certificate, usually valid for 30 to 90 days, buyers will feel confident they can purchase a home in their price range.
-- Take your time buying a home.
Because the home-sale market is slow now in most communities, buyers need not rush into a home purchase. Home purchase quests often take several months. This is an ideal time to get to know the neighborhood you are considering. Check school district test statistics, local crime rates, flood areas (flood insurance is expensive), transportation, shopping and the actual commute time to your job in a rush hour.
-- Work with a top-quality buyer's agent.
A home-purchase is made easy with the help of an experienced buyer's agent. Ask friends, business associates and neighbors who recently bought homes for names of recommended buyers' agents.
A top-quality buyer's agent will lookout for the buyer's best interests, just as the listing agent looks out for the seller's. The best buyers' agents are familiar with several adjoining neighborhoods, but they don't try to sell homes in areas with which they are not familiar. If you are considering buying a home in two distant communities, you might need two buyers' agents.
Receiving half the sales commission on a listed home sale usually compensates buyers' agents. If the residence is a "for sale by owner" (called a "fizzbo"), the seller usually agrees to pay the buyer's agent 50 percent of the customary sales commission.
-- Expect your buyer's agent to help arrive at a fair offer price.
Before making a purchase offer on a home that interests you, ask your buyer's agent to prepare a written comparative market analysis (CMA). This form, similar to a CMA prepared by the seller's agent when the home's asking price was set, shows recent neighborhood sales prices of comparable homes. Because of the recently changing home-sales market conditions after Sept. 11, only recent home-sales prices should be considered.
- NUMBER1EXPERT™ 
