a home is sold - Zillow CEOWith 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.

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This comment relates to the piece that aired on the Today Show with regard to real estate appraisals. I'd hate to think the public thinks so many appraisals come in low primarily because of appraisal fees and that higher fees would automatically equate to higher value appraisals.

My issue with things like this continues to be that every time an appraisal comes in low, it's auto-labeled as a bad appraisal. If the appraiser is a newb/inexperienced or not geographically competent--fine. Bad appraiser = bad appraisal. But nobody seems to take the attitude that a truly qualified appraiser is one that's fair, impartial and independent and that often the appraisal that comes in low, by some standards, is actually the more accurate and should be viewed as the safety net for the buyer in not paying too much and a lender and the taxpayer not lending in excess of 100% of the true value.

This ongoing push that the high appraisal is always the better appraisal is NOT consistent with Fannie's definition of MOST PROBABLE SELLING PRICE. They need to go back and re-define market value as the HIGHEST POSSIBLE PRICE at which point, I'd be perfectly comfortable with pulling comps by their highest selling price as my primary criteria and pushing for the highest end of the value range every time. The appraiser is supposed to look at the subject's location and physical characteristics FIRST and then go into the marketplace and pull those sales that have the highest degree of similarities allowing the market to dictate the subject's value range. Not the other way around. We're also supposed to invoke the Principle of Substitution and compare the competitive/available listings and analyze those as well.

To define Market Value one way, yet pressure the appraiser to hit the highest price vs. the most probable price is what helped get us in this mess to begin with and why so many appraisers were left hanging and turned into State Boards by the very lenders that rewarded them with repeat business back in the "good old days". However, once those same lenders realized signficant losses due in part to inflated valuations-- they can't sue the appraisers fast enough.

If a Seller is willing to sell and a Buyer is willing to Buy at a certain price it's a free market economy and God Bless them. IF THE BUYER IS USING HIS OWN, PERSONAL FUNDS. If, however, he's using other people's money in the form of a Federally Related Transaction (FRT) then a whole different set of rules kick in and that is what most people simply don't understand.

The views, the bigger yards, the newer A/C system-- that can sometimes make a difference in the value, at least in my market, doesn't always make that big of a difference not to mention that often we can't measure those kinds of features against the comparables to such a high degree of accuracy.

March 13 2012 at 10:36 AM Report abuse rate up rate down Reply

One of the main important thing is research. Always do research. You can never do enough research. A lot of people dive into the property market head first and blind folded, and that’s when people make bad purchases. If you like a property, find out about the surrounding area; find out the local crime rate, find out how much properties in the area recently sold for. Find out EVERYTHING. There are tonnes of websites out there that will give you all these details at no cost.

January 13 2012 at 8:37 AM Report abuse rate up rate down Reply