Price matters notwithstanding, buying a home in today’s economy is different than in years past. As a potential buyer, here are 5 important considerations before you purchase a home in the near future:

1. Flip at your own risk. The housing market is looking up, but if we’ve learned anything over the past two years, it’s that real estate isn’t always a sure thing. Unless you have a steady stream of truly disposable income, purchasing houses as short-term investments is very risky. Ideally, you should only purchase a home in the coming year if you plan to live in it for at least three to five years, says Mike Larson, a real estate analyst at Weiss Research. With the risk of home values declining yet again, doing otherwise puts you at risk for being upside down in the house—a position no one wants to be in.

2. Purchase within your means. Your monthly housing payment should not exceed 35 percent of your gross monthly household income. With most of the country still feeling the effects of the credit crunch, now is not a good time to stretch your finances. Make sure your potential purchase is something you can conservatively afford. Also, given the current low rates, it’s best to target a 30-year, fixed-rate mortgage rather than an adjustable rate that may seem enticing, but is much more unpredictable.

3. Consider job security. With unemployment rates high and predicted to rise, you are wise to consider you and your family’s level of job security before entering into a real estate transaction. A sudden loss of income makes it extremely difficult to maintain an otherwise affordable mortgage. In many cases, job loss can result in default. In order to get the best mortgage rates, most would-be home buyers will need solid credit, a decent down payment, and documented income verification, says Keith Gumbinger, vice president of HSH Associates. Therefore, if you’re uncertain about your job security, or if you can’t meet the credit requirements, you should probably hold off on buying a home until the economic outlook improves.

4. Explore the foreclosure market. Foreclosed properties often mean sharp discounts and could result in you being able to purchase more house than you could otherwise afford. Because foreclosed home buying presents its own unique set of challenges, it’s best to seek the help of a professional with experience in the foreclosure market unless you are a veteran real estate investor.

5. Ask and you just might receive. Given the excess number of homes on the market, buyers have the advantage. Without insulting the seller, now is the time to ask for concessions along with the sale. Help with closing costs, a decorating allowance, even considerably lower than listing price offers are all fair game in today’s market where sellers are anxious to move property. Or, if you have some other form of concession in mind, ask for it!


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