THE HELP DESK The Help Desk: Top Tips

First-time homebuyers get ready

Finally! We have some good economic news. This week we had several indicators that point to a housing recovery.

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By Gerri Willis, CNN personal finance editor

For more information on managing your largest investment, check out Gerri Willis' 'Home Rich,' now in bookstores.

NEW YORK ( -- Home sales, construction and prices all jumped in June. So, how can you take advantage of these events?

1. Beat the deadline

One of the biggest carrots for first-time homebuyers is the government's $8,000 tax credit. If you're in the market for a new home and you qualify for the tax credit, you'll have to purchase your home before December 1st of this year.

If you're buying a home with an FHA-backed mortgage, you can use this money at closing, or to help with the down payment costs, after you've covered the first 3.5% of down payment. For more information, go to

  • 2. Look beyond price
  • If you're trying to buy at the market's bottom -- good luck. Don't try to time the real estate market. It's impossible.

    Having said that, if you want to estimate the market's ability to recover, consider the following factors: the local jobs climate. Where there is unemployment, you'll find more foreclosures and lower home prices. Scan local newspapers for large layoffs in companies that are based in the area.

    Consider too where your area is in the market cycle. Have prices stabilized? Are they still going down? How much inventory is on the market? A good realtor can help you weigh these issues.

    If the inventory is growing at a slower rate, or shrinking, then the market in that area is stabilizing says housing expert Brad Inman.

    Next, walk through the town and look at the condition of the neighborhood. How many homes are abandoned? Are people taking care of their yard? Talk to the neighbors. That is a valuable source of information.

    3. Use your leverage

    First, you have to know what you can afford. Just because some homes are selling for half of what they used to, that doesn't mean it's a bargain for your wallet. Down payments can be 20% or more in some markets.

    Use your leverage as a buyer. There are a lot of sellers who are desperate to sell their homes. Ask for seller financing. You may be able to get a partial down payment or closing costs covered. You may also consider taking advantage of programs run by nonprofits that help people buy their own homes.

    Go to the U.S. Dept. of Housing and Urban Development at to find out about programs you may qualify for.

    -- CNN's Jen Haley contributed to this article.

    Got a financial dilemma? Go to to submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. To top of page

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