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Advice for first-time homebuyers in current housing market

With mortgage rates near 60-year lows, first-time Massachusetts homebuyers might be wondering if now is the right time to buy. Although the residential real estate market is not exactly booming and prices are somewhat depressed, these low interest rates and the improving economy point to the possibility of an increase in residential real estate transactions this spring.

If you are one of the many first-time homebuyers looking for an affordable home this season experts advise to plan for a lengthy search because the low rates could bring competition. The current median price for first-time homebuyers in 2011 was $155,000, according to the National Association of Realtors.

In one search sources used the home value index provided by Zillow. The study measured the median value of all homes in a geographical region, not just the purchase price of recently sold homes. In searching for homes valued between $152,500 and $157,500 in cities with a population of 10,000 or more they found the largest community with homes in this price range was Worcester, Massachusetts, which has a current population of roughly 183,000.

There are a number of factors involved in finding just the right home for your family and at just the right price. Many of the residential real estate transactions being conducted today involve short-sales, where the bank allows the current owner to sell a home for less than the current loan value. Many banks also have an inventory of homes already foreclosed on. These types of sales can be complicated real estate transactions, especially for a first-time homebuyer, however they are not impossible.

A residential real estate attorney experienced in all aspects of real estate transactions can help new homebuyers eliminate much of the hassle. Especially if the negotiations include drafting of offers and purchase agreements for short sales and foreclosure homes. If you find your dream home to be a short-sale or foreclosure home you will likely encounter competition, but that's okay. People have become much more knowledgeable about buying foreclosures than just a few years ago so arming yourself with a well-written offer and purchase agreement can help you secure that dream home.

The laws regulating the real estate markets continually change and more so in today's challenging lending environment, so experts recommend doing your homework first and learn what you can afford before you begin the search.

Source: Chicago Tribune, "First-time buyers: Do homework, then shop," Carolyn Bigda, March 9, 2012

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