CNN/Money's tips for home buyers

What’s the best way to play a housing rebound? That depends on what type of home you’re looking for. A recent article from CNN and Money Magazine broke down the market into three price tiers — the bottom (characterized as “hot”), the middle (“cool”), and the top (“cold”) — and offered advice to buyers and sellers in each. Here’s some of what they recommended for people planning to purchase a new home:

The bottom tier:

  • “See homes the first day they’re listed, and if there’s one you want, submit an offer immediately.”
  • “Don’t expect a deep discount; prices for lower-end homes are stabilizing.”
  • “Put down 20% or more.”
  • “Offer not accepted? Check in with the seller’s agent a few more times; many deals fall through.”

The middle tier:

  • “Unload your current home first, so you know what you can afford to spend on a new place.”
  • “Offer 10% less than the asking price — a realistic discount for a lukewarm market.”

The top tier

  • “Get pre-approval before you shop: Jumbo mortgages are tougher to qualify for, require larger down payments (as much as 30% to 40%), and cost nearly a percentage point more than smaller loans.”
  • “Ask for freebies: While sellers often balk at low-ball offers, they should be willing to negotiate, including paying closing costs and other extras. If the seller refuses, move on.”
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