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A growing sentiment is that prices of residential real estate (houses, condos, and coops) may very well decrease over the next several years, at least in certain areas including many sections of metro NY.   In last week's column, I offered four steps for sellers to consider in case they believe that view.   In this week's column, I suggest several steps for buyers to consider.   Of course, you should evaluate my points in the context of the particular circumstances of your own situation, the area in which you desire to make a purchase and the specific properties.

1.   Do more digging about your real goals and underlying reasons to buy.  

In recent years, as prices generally increased significantly in many regions, including metro NY, and Westchester County specifically, many buyers who determined that they wanted to buy a certain type of house in a certain type of area felt rushed to proceed to buy before prices went up further.   On the part of many buyers, anxiety had underlined, and, in some cases, undermined the purchase decision.   In the scurry, key elements of good decision-making may have been overlooked.   Now, as prices have moderated, and with the real prospect of actually declining, the buying process in much different.   You can ask yourself the tough questions. Were you primarily motivated by the greed of making a quick gain?   Quick flip gains will be tougher.   If you are a first-time buyer, perhaps you should buy a house rather than a condo or coop.   Where do you want to live from the standpoint of living not just reaping gains?   How large a role are status, money, and ego playing in your thinking?   If you assume that the purchased home will merely appreciate slightly, if at all, over the next five years, do you think you really want to buy that particular property you are currently considering?   Perhaps it makes more sense to opt for a smaller house and property near your job and in return spend a lot less time commuting.   Maybe, you should stay in your current main home and start planning to buy a small vacation house?   Should you consider a two-family house?   How does the age and health of you, your children, and your parents influence your buying decision?   Is your income so predictable that you will continue to easily handle a big mortgage in the event the economy turns down?   Do you have sufficient liquid assets to sustain a prolonged loss of income?

2.   Get more involved in the buying process.  

The internet has made it possible to much more easily research areas and properties.   Get fluent with the key sites, the multiple listing service, the ways to communicate among agents and advisors, for-sale-by-owner listings, etc.   Go to many open houses.   Although it is usually beneficial to get the expert help of real estate agents, financial advisors, attorneys, mortgage bankers, and other parties, you can and should do most of the research on your own.   Then after you do your research, the help you get will be better focused and more pertinent.    Not being in such a rush to buy can give you more time to do the research.   Also, look for extraordinary values.   In a "buyers' market," when prices are slower to rise, or are flat or falling, you will notice that the properties which lack the instant appeal of beautiful landscaping, neat and tidy exteriors, impeccable insides and other staging strategies sell even more slowly.   And their prices usually fall more.   As competition heats up among sellers to interest buyers, the homes that are a bit run-down or lack pizzazz could indeed represent value gems.  

One strategy you may employ is to look at two different groups of houses (or condos or coops).   The first group has the move-in beauties best suited to your busy lifestyle.   The second group has the homes that will need work, but are priced significantly lower than the first group.   Explore ways you can get the needed work done with detailed estimates and figure out whether buying a home in the second group may give you much more value.   You may be able to buy in the area you want, the size and type of house you want, and one that can yield eventually more appreciation potential.   Of course, it depends on whether you can spend the extra time demanded by the second group.   Perhaps, lessen the time spent on leisure or your hobbies and do the research over a few months.

Let people know you are considering a purchase.   If prices stagnate or fall, there will be lots of buzz about the frustrations of selling and the long delays.   Get into the buzz pipeline.   Enroll in websites.   Register with real estate agents.   Talk it up among relatives, friends and business contacts.   The more opportunities you learn about, the greater will be your buying decision.

 3.   Be organized.

Keep organized records from the beginning.   Profiles of prospective properties.   Key contacts.   Community information.   Budgets.   Your objectives and decision points.   The more intelligent you are in the process, the greater is the chance of finalizing a correct decision when you are emotionally triggered by the home that seems to be a perfect fit.

4.   Empower yourself with confidence.

The times ahead may bring many buying opportunities.  The more prudent, thoughtful and expressive you are, the greater the possibility of finding the right home in the right location at the right price.

About the author.

Frank Sisco is a CPA and Personal Financial Specialist, and author of many articles about personal finance and issues of life and money.   His firm, Financial Management Corporation, is located in New Rochelle, NY.  Frank makes his home with his wife and daughter in New Rochelle, NY.  He can be reached at 914.740.4422 or by email at ideasmoney@aol.com.  Visit his website at www.LifeAndMoney.com, which contains this and prior articles.