Pendulum is swinging back toward the buyer

By Kate M. Jackson, Globe Correspondent | April 2, 2006

Buyers, start your engines.

The spring house-hunting season, traditionally real estate's busiest time, is already off to a strong start due to the mild winter.

But unlike recent years, home buyers have the upper hand, as the recent slowdown in real estate has resulted in a huge inventory of houses and sellers anxious to make deals. Analysts say that well-informed, flexible buyers will be in the best position to negotiate and capitalize on current market conditions.

''While buyers are under less pressure to make quick decisions, there are many more homes to choose from and thus more homework involved," said David Wluka, president of the Massachusetts Association of Realtors.

So buyers: Be patient, but be ready to strike. Get preapproved for a mortgage and have other financial paperwork ready. Take advantage of a seller's calendar; if, for example they're itching to move, or want to wait until the school year ends. Get to really know an area, what's available there, and how home prices have moved recently. And, get help -- a buyer's agent, that is.

The number of homes and condominiums for sale rose 40 percent in February from the year-ago period. The single-family-housing market has been flat, with prices in many markets falling slightly or barely moving. The condo market, meanwhile, seems to be holding up slightly better.

Chris Zani and his fiancée Amanda Tyler were rewarded for their three years of watching what he termed a ''way overpriced" market in Charlestown, and shopped for a condo only when unsold units piled up last summer.

''We wanted to stay in the neighborhood," Zani said. ''We had a roof deck at our apartment and wanted to find a condo with one too. We decided to wait it out to see if prices became more realistic."

Eventually Zani noticed sellers pulling properties off the market with the intent of relisting in the spring.

''We found a condo we liked and decided to move on it before it was pulled off too," he said. In February the couple closed on a 1,000 square-foot, two-bedroom condo -- with a roof deck -- on Salem Street for $419,000, which Zani considers a ''fair value" for a condo there.

William Fastow, a realtor with Re/Max Old South on Tremont Street in Boston, suggested buyers not only be looking for the right house, but the right situation as well.

''There are two kinds of sellers out there: Those who have to move and those who do not have to move," he said. ''If you can find sellers who really need to unload their homes, you'll be in a much better place to negotiate."

He advised shoppers to hire a buyer's agent because they can often find out what a seller's situation is for you. It's a good deal for the buyer, too; in most cases, listing brokers split their commissions with a buyer's agent.

''Having a buyer's agent gives you more of an advantage during the negotiation process because the seller is never aware of the price you are willing to spend -- unlike listing agents, who are only trying to negotiate the highest possible price for the seller," said Barry Nystedt, president of MassBuyerAgents.org. ''Especially in a market like this one where there are more properties to choose from, a buyer's agent can help you wade through listings, help you find the right buyer-seller situation, negotiate a good deal, and navigate the inspection phase."

First-time homebuyers Scott and Amanda Pepper hired an agent after the new parents outgrew their one-bedroom apartment on Beacon Hill. They were originally searching for a condo or townhouse in the Malden area but their agent, Richard Rosa, suggested they could afford a house with a backyard if they looked farther north.

''Neither of us is from Massachusetts, so we really needed advice on neighborhoods and the housing market in general," said Amanda Pepper. ''We both decided it was worth a longer commute to have a nice house in a neighborhood we loved."

The couple recently signed a purchase-and-sale agreement for a 2,000-square-foot, four-bedroom home in Haverhill for $332,000. It was originally $336,000 but Rosa helped negotiate a seller's concession that covered their closing costs.

Concessions such as these often go to more flexible buyers, said Rosa. If you're a first-time home buyer, you can close quicker because you don't have another home to sell. On the flip side, sellers may go lower on price for buyers who can cool their heels awhile -- for instance, if a seller with children does not want to move until the end of the school year.

Still, while it's no longer necessary to bring your checkbooks to open houses or expect to pay asking price, don't expect fire-sale prices yet. Wluka, the realtor association president, said sellers aren't at the point of accepting super low-ball offers. Moreover, he said buyers should be prepared for small-scale bidding skirmishes for priced-right homes, particularly under $500,000, a level where there are fewer homes.