Tips from the experts on how to navigate an up and down real estate market

A slumping home market means it's time to buy, right? A booming real estate market often signals it's time to sell, real estate agents say.

Financial experts and house sellers can point to dozens of factors that say it's the right time to buy or sell - from the time of year to how tidy your neighbor's lawn is.

But buying or selling a home, often the biggest financial decision a person can make, shouldn't simply come down to the ebb and flow of credit and housing markets. Credit counselors and real estate agents say whether to buy, sell - or for that matter, not sell - is a deeply personal decision that comes down to individuals, not markets.

BUY
With a slowing housing market, many could say buyers have leverage to get great deals on homes. Home sales in Hidalgo County during 2008 are down slightly from the same period last year, according to the Real Estate Center at Texas A&M.

But at the same time, the median price for a single-family home in the area is up nearly $5,000 to $100,400.

Right now, financing may be the biggest factor in whether someone should take the dive and buy a new house.

The average interest rate on a 30-year fixed-rate mortgage is 6.34 percent, according to Bankrate.com. The rate is the highest in more than a year. Recently, banks have also tightened lending standards and raised rates due to huge losses suffered because of the nationwide increase in foreclosures.

With fewer people able to get loans, the time is right for those with financing to get a home, said Edna Taylor, a broker for Real Estate Services in McAllen.

"It's hard to get financing right now, so if you have a loan secured, you have an advantage," she said.

But mostly, Taylor said people should step into a new home purchase if they have the income to support it. The tax benefits and investment opportunities from owning a home can make the buyer money in the long-term, she said.

Most experts say that no more than one-third of a person's take home income should go to pay for their home, including insurance and taxes.

SELL
Real estate conditions are rougher than they were two to three years ago, but it doesn't mean selling a home is impossible or even difficult.

Summer is traditionally the biggest selling season, as children are out of school and parents aren't burden with big bills such as Christmas and Thanksgiving, Taylor said.

Again, experts say the only good reason to sell is personal reasons such as a change in salary, an addition or subtraction to the family.

"People think they need to move just because they have an itch," Taylor said. "You should have a good reason for it."

Before anyone decides to sell their home, they need to make sure they have the financing lined up to get into a new one, said Marla Lutz, senior counselor with the McAllen office of Consumer Credit Counseling Services of South Texas. Today's tighter credit markets can make it more difficult for homeowners to get the same loans they received five years ago, even with equity on a home.

HOLD
With market conditions rough for many, holding could be a good decision for anyone without a significant reason to buy or sell a home, Lutz said. She also advises that people take the cooler market conditions as an opportunity to decide whether they can qualify for a new home.

Most banks no longer offer loans with no down payment, so any borrower should be ready with a 5 to 10 percent down payment. Saving for a big down payment will also help a borrower qualify for a better interest rate, she said.

"Right now buyers need to have a minimum of $5,000 to $8,000 on hand for a down payment and closing costs," Lutz said.

Holding also gives potential buyers and sellers time to check credit scores and clean up any past blemishes.

Homebuyers should also take time to carefully examine how much home they can afford, Lutz said.

"You have to factor everything in, like property taxes, homeowners insurance and maintenance," she said. "There can be a lot more to owning a home than just a mortgage payment."

Kyle Arnold covers business, the economy and general assignments for The Monitor. You can reach him at (956) 683-4410.