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As home prices continue to fall and foreclosed properties flood the marketplace, a lot of folks are wondering if now is the time to get in on the good deals. I realize there will be many, many differing opinions on this, but I thought I’d offer just a few:

Foreclosure properties are abundant, yes, but you need to be careful. Shop the market, know the neighborhood and eyeball the properties you’re interested in. Make sure nobody’s squatting there, etc. Also, make sure there are no hidden liens or taxes on the property. You want that place free and clear.

It’s also better to avoid the auctions in some markets, as competition is getting high in specific areas. Perhaps best to go through a real estate agent specializing in foreclosures. As the banks and lenders get more and more of these on their books, they’re hiring agents to sell the REO properties.

What about new properties in the spring market? I’ll tell you, I was out yesterday doing my Sunday afternoon sport, that is, hitting the open houses, and here in DC prices are still pretty strong, but offers, I’m told by the Realtors, are coming in low. I was surprised to see a house on my street (beautiful renovation and tons o’ space) go for below asking after only a week.

I think sellers today are skittish, and they’re willing to take some lowball offers. This house got two offers, one low and one seriously low. Don’t be nutty and make an offensive offer, but do know the comps and the neighborhood and know that you certainly shouldn’t go in at asking price these days.

Selling? There’s the rub. For those of you who want to buy a home, many have to sell first. I’m seeing more and more come on the market as we get deeper into March. And I saw plenty of buyer traffic this weekend.

Downsides? Credit. It’s tougher and more expensive these days to get a mortgage if you need a big one or if you don’t have stellar credit. Also, there’s of course no telling how low prices will go, so in some markets you could be catching a falling knife. And again, with the glut of foreclosures in certain local markets, that will lower the prices in the area even further.

Remember however that all this is general and all real estate is local. Do your homework where you are, and you’ll be in the best position to make that decision to sit tight or jump.

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