Educate yourself about the home buying process.

A good place to start is www.hud.gov/buying/index.cfm.

Know your local real estate market.

Ask yourself is it a buyers or sellers market, is it custom for the buyer to pay for the closing costs or are sellers paying the closing cost for them. Are property values rising or falling? You might want to ask your buyer consultant or loan officer these questions. They should be aware of these trends when it comes to your local real estate market.

Before you make an offer on a home, due your homework.

Many For Sale By Owners have been known to significantly over or under price their home. It's not nearly as much of an issue as it once was. Because now homeowners have the ability to go online to sites like www.housefront.com and others to obtain there homes value. Be aware though such sites have been known to be tens of thousands of dollars off the true market value. But for the most part these sites can act as a useful tool in figuring out roughly what the market value is. Another good online source for property values is your local county records. Many counties now have this information online. To quickly find your local county web site go to: www.naco.org/Template.cfm?Section=Find_a_county&Template=/cffiles/counties/usamap.cfm. You are looking for the assessed value, which can be found in the equalization department on most county web sites. If you're having trouble locating such a link, call the county office and ask for the equalization department. Let them know you're looking for the assessed value of a property you're interested in buying. While you're on the phone with them, ask them if they would be kind enough to give you the web address for the direct link that allows you to look up a property's value online. Most times they will be more then happy to supply you with this information. This will save them from having to look up property values for you in the future.  If the house you're looking at is priced significantly higher then both online sites and the assessed value, then one of two things might be behind this. The first is the homeowner didn't do their homework and just made and an "educated" guess or they've had their home recently appraised.

A recent appraisal always holds more weight than a home value obtained on the Internet or the appraised value. Some homeowners have been known to fix up the interior of their house and not the exterior, for the sole purpose of having a lower assessed value therefore resulting in a lower tax bill.  So more then likely the homeowner is justified in their asking price. There are a few exceptions to the rule though.

They are as follows:

The appraisal isn't current and therefore might not be the current market value. Not having a "current" appraisal isn't a problem for buyers when property values are rising. Having a homeowner go off an outdated appraisal to price their home in a market of increasing property values is to the buyer's advantage. It would really be beneficial if you where in an area where property values are skyrocketing. For example out in California in the early 2000's property values where climbing double digits within six months in some areas. That might not sound like a lot but when you take the average cost (well over a half of million dollars in many areas) of a home in California into consideration, then it doesn't take long to see the potential savings. So the meaning of "current" will vary depending on your local market conditions.

Be wary if the homeowner shows you an appraisal that was required by a lending institution. (When a bank lends money for a piece of property, they require an appraisal to be done. This assures that they have "adequate" protection if the homeowner should default on their loan) Particularly one that was done for the purpose of a home equity loan or a refinance. These appraisals tend to be inflated to justify the loan amount. Therefore causing many homeowners to owe more on their home then it's actually worth.

Shop Around for the Best Service Providers

There are many service providers out there who can provide the services you need when buying a home. Ask around for different prices and special deals you might be able to work out with different providers. Reozom is able to provide competative rates for different service providers you may need and there are also many other directories and resources available online to find other providers as well.

Here is one such directory: Free Real Estate Directory

Get Pre-approved for a Mortgage

A seller is much more likely to take your offer seriously if they know you have the funds to back it. We recommend you present your pre-approval letter with your offer. Some sellers won't even show you their house unless you can show proof of funds. If you're fortunate enough to be paying with cash, be willing to show the seller a financial statement of some sort as proof.

Hire a Buyers Consultant 

Legal issues pertaining to real estate can be complicated and should be left to the professionals. Don't go it alone, it could end up costing you a lot more money then it would have if you had hired a real estate attorney in the first place. The seller is probably going to have a sellers consultant working for them, so why not do the same and hire a buyers consultant to look out for your best interests. The seller may even be willing to cover the costs as part of the deal. (On a property's listing page the seller will let a potential buyer know if they are willing to pay for a Buyers Representative (Realtor) or Buyers Consultant (real estate attorney) and just how much. Which is either given in a dollar or percent amount. Usually a dollar amount for a Buyers Consultant because it's less expensive to hire a Buyers Consultant than a Buyers Representative, which is usually stated in a percent amount. Of course as with most every thing in real estate nothing is written in stone and therefore is negotiable)

Hire a Home Inspector

The small price (usually around $250 depending on your area, size and type of property) you pay now to have a property inspected could literally save you tens of thousands of dollars later on. There's nothing more maddening than finding out you've been "taken" because of your lack of due delinquency.

Be willing to look at Unconventional Finance Options

Many homeowners are now offering unconventional finance options to increase their potential pool of buyers in an increasingly competitive market. Here are some of the more unconventional finance options being offered; rent to own, equity sharing, seller financing and down payment assistance to name a few. These options are ideal for people with damaged or no credit.

If you're looking at purchasing a home that's in need of repairs, consider asking the homeowner if they would be willing to allow you to fix up the home in exchange for equity. It would help if you have a proven track record showing you have the skills and knowledge to do this type of work. Like anything else be sure to get everything in writing.

Consider contacting a family member, friend or investor to co-sign for you. An investor is going to want something (money/partial ownership) in return for their efforts. After all that is why they are called investors. Ask them if they would be interested in the idea of equity sharing. Now days many savvy investors see this as a viable alternative to the headaches of being a landlord. Don't be afraid to offer this option to friends and family also. After all, they to are taking a significant financial risk by co-signing onto a loan on your behalf and should also be rewarded in return.

Bring a Digital Camera and take Notes

It's always easier to rely on pictures and notes then your memory. Before you take out your digital camera before sure to get permission from the homeowner. Some people are leery of the notion of having a complete stranger taking pictures of the inside of their home.

Remember you're just not "buying" the home but also the neighborhood and schools.

Here are two great web sites that will allow you to get a feel for the neighborhood and schools: www.bestplaces.net and www.schoolmatters.com.  

Don't be shy about asking questions.

One question that should always be asked is how did you arrive your asking price. If they inform you that they had an appraisal done, don't be afraid to ask to see it. The seller shouldn't hesitate to answer your questions and be willing to back up what there saying with solid proof.

Always take a second look at a house you're interested in.

The second showing might reveal something you didn't notice the first time. The homeowner should be happy to show you their house again. After all this indicates you're truly interested in purchasing their home.

If you see something you really like about the house let the homeowner know, they'll appreciate it. Last but not least don't forget to thank them for taking the time out of their busy schedule to show you their home.

Happy House Hunting and Good Luck.