In the past two years, the real estate market has certainly undergone some dramatic changes. Shortly after the 21^st century was ushered in, the market was nothing short of sizzling, with bidding wars characterizing the market climate. After just five years; however, signs of cooling emerged and now it appears buyers have gained the upper-hand in a market that is decidedly soft.

Today, the market presents a challenge for both first time home buyers and sellers; who have little experience in a soft market following a market that remained strong for a prolonged period of time. In many regions the inventory of homes for sale continues to rise and listing prices are now lower than the comparable sales prices of last year. To make things even more difficult, the number of closings has fallen lower than last year as well.

Despite the current buyer friendly climate; however, many first-time home buyers are somewhat reluctant to take advantage of price declines, feeling the market may have yet more surprises in store. In addition, surprisingly, reports indicate home buyers may feel that homes are still overpriced, despite declining asking prices.

While there is certainly no guarantee that home prices will not continue to fall, there are some indications that home sellers may be more eager than ever to cut a deal. If you are first-time home buyer and have been waiting on the sidelines, wondering if now is the right time to buy, this could be the news you’ve been waiting on. In fact, the number of homeowners in default on their adjustable rate mortgages is continually climbing. Some homeowners have even elected to simply walk away and let the lender foreclose on the home just to get out debt problems. What does this mean for first-time home buyers? Better deals in the housing market. Here are some advices for first-time home buyers:

The most important element that for first-time home buyers should take into consideration when thinking about purchasing is the direction real estate prices have taken in their local area. While national trends may be somewhat alarming, in many cases these trends can have extremely little to do with your local area. The best key to avoid overpaying is to keep an eye on local trends.

If home prices in your local area have not recently fallen much and interest rates are still low, now could be a good time to buy. To avoid overpaying, it is important to keep the following tips in mind.

First, always research your local market. Use a comprehensive market analysis to determine if the home you are considering is priced fairly in relation to comparable houses for sale in the local area. Actually, this should occur before you even begin to shop around for a house. To do this, simply gather the listings of homes in your local area and price range. You will also need a list of the most recent sales prices as well as the original listing prices of comparable homes in the local area. This information is widely available on sites such as www.realtor.com. You can also obtain this information from your local realtor.

Next, make sure you are asking the right questions. Find out when the home seller bought the home, how much they paid for it and why they are now selling it now. These critical questions, asked early during the home buying process, can help to ensure you do not overpay for a home simply because the home seller does not want to lose money. Be aware that sellers and agents can be reluctant to provide this information; however, if you let them know that you need this information to make a purchase offer, they will often be more willing to provide you with the information you need.

Keep in mind that home seller who either purchased their homes awhile back or who paid much less than they are now asking will typically have more room to negotiate regarding price. In addition, they may be more willing to negotiate if they must move due to relocating for a job or because they simply can no longer afford the payments.

You may also be able to find a good deal by looking for a home that may be in a great location but simply needs some freshening up, so as new paint, flooring, an updated kitchen, etc. Homes like these typically receive less attention and consequently home sellers are often more willing to negotiate.

Always make sure you get an inspection of any home you consider buying and include an inspection contingency clause in the purchase contract when you make an offer. Doing so will ensure you have the right to hire a professional inspector who can identify problems and needed repairs. If it turns out that the repairs identified are significant you can then make a counter offer to your original offer that will reduce the price by the costs for making the needed repairs.