With home values down 26% since the market's peak in 2006, and mortgage rates still at historic lows, it's a great time to buy a home, says Zillow's CEO, Spencer Rascoff. I recently caught up with him in New York City, and he shared his buying tips:
1. Arm Yourself with Knowledge
Take full advantage of all the tools and information available online. Access listings information, see photos, learn what the seller paid for their home, view price reductions and days on market information, and see an estimate of what the home is worth (a great starting point is Zillow's "Zestimate"). Having a reputable real estate agent also helps, says Rascoff, but his main message is this: knowledge is power.2. Shop Outside Your Price Range
While the rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary, that doesn't mean that you shouldn't look outside your price range, says Rascoff. Given the glut of homes on the market, most sellers will entertain all offers (providing they're not insultingly low) and be willing to negotiate. Remember: the listing price is just the suggested retail price.
3. Consider Foreclosed Properties
New stats, released today, show that banks repossessed one million homes last year -- yet the bleakest year is upon us! In 2011, as many as 1.2 million homes are estimated to be repossessed. This spells opportunity for savvy bargain hunters (not to mention investors). Foreclosed homes are typically 20% cheaper than non-foreclosures, even for homes of the same condition, says Rascoff. Plus, they're a lot less complicated -- and intimidating -- than a short sale. Interested? Start by finding foreclosed properties in your area by going to sites like foreclosure.com, foreclosures.com (note the plural) and Realtytrac.
Zillow CEO's Top Three Home Buying Tips