In Control

Samantha Justice needed to make some connections. In May, at a networking event for young black professionals, the 23-year-old human resources specialist for Sibley Heart Center Cardiology in Atlanta mingled with her peers, exchanging business cards and war stories about life in the working world. There she made one critical connection–with Justin Giles, who would be her future real estate agent.

With her apartment lease soon to expire, Justice had toyed with the idea of purchasing a home. She talked with co-workers and learned that the market in her area was a buyer’s market. As a recent graduate of Hampton University, Justice could easily have waited to make such a large purchase, but she wanted to take advantage of her potential negotiating power. “In a buyer’s market, there is an abundance of properties,” says Giles, of SWG Realty, “and if the seller does not want to negotiate, you can easily move on to their neighbor or the next place.”

After researching the home-buying process for several months, Justice set her budget at $160,000. For those with a desirable 700-plus credit score, establishing a budget is critical, she stresses. “Lenders love to take advantage of buyers with high FICO scores, or great credit history, by attempting to loan them more than they can actually afford,” she says. Her advice makes sense: Atlanta ranked No. 12 on the list of top cities for foreclosure filings during the first half of 2007, according to

Justice qualified for 100% financing, obtaining a 30-year fixed interest rate of 6.5%.

After just one weekend of looking, Justice selected a $160,000 two-bedroom, two-bath townhome in northwest Atlanta. She offered $155,000 and prudently included a contingency clause in the contract that required the making of any repairs her inspector deemed necessary–a concession more easily obtained in a buyer’s market. The parties agreed to a price of $157,000, and Justice received a check for $4,000 to cover repairs. Because of the market environment, she was also able to negotiate having the seller pay her closing costs, which came to nearly $6,000.

In her home since June, Justice pays $1,303 every month, which includes her mortgage, homeowner’s insurance, mortgage insurance, property taxes, and other fees associated with owning a home. Justice is thrilled with her purchase. “I see my investment grow every time I pay into my mortgage, but most importantly, I’m happy to call my place home.”

Tips for making the most of a buyer’s market:
Prepare a contingency contract. Include an inspection contingency within the sales contract to ensure necessary repairs are completed to your satisfaction. Compare several estimates before work begins, to make sure that the cost of repairs is accurate.

Don’t pay for the closing. Use your negotiating power to have your closing costs covered by the seller. Typically, closing costs amount to 2% to 4% of the total purchase price, says Keith Gumbinger, vice president of HSH Associates, a financial publisher.

Set your limits. Calculate the loan amount you can afford and do not exceed it. Consider the additional costs of homeowners