Real estate website Zillow released the results of a survey on homeowners’ perceptions last week. While we’re all aware of the difficulties facing the housing market these days, Zillow’s survey revealed some nuances that you should be aware of — especially if you’re thinking of buying a new house any time soon.

According to the survey, 62 percent of US homeowners believe that their home’s value has increased or stayed the same in the past year. That’s a phenomenal number, especially when you consider that 77 percent of US homes have declined in value in the last 12 months. Homeowners realize that house prices have dropped, but the majority of the same set of homeowners just don’t think it could happen to them.

This can cause some problems when these homeowners decide to sell. It seems like every seller thinks that they can get at least what they paid for their home — and they’re willing to hold out for it, at least for a little while. For buyers, it’s an added complication in the process. It’s not a good idea to be the first person to put in an offer these days.

There is also a problem for homeowners themselves: many are counting on their home value to help when they take out a second mortgage, home equity line of credit or refinance their mortgage in an effort to handle other financial issues. Zillow’s survey also showed that over half of homeowners are planning home improvements — ranging from minor projects like repainting to major projects like installing a new roof.

The same perceptional problem is reflected in where most homeowners think the market is going, as well. Zillow reports that 75 percent of homeowners expect their home’s value will increase or stablize in the next six months — but 42 percent think that home values in their area will decrease. It will happen to the neighbor’s house — not mine.

Whether or not you currently own a home, these numbers are worth considering. Plenty of people think that right now is a great time to buy a house, due to the lowered prices. But these same people seem to believe that there will be a fairly immediate rebound in the housing market.

If you’re shopping for a new home, it’s worth focusing on a long-term plan rather than thinking about the current low prices. You don’t want to wind up in that 62 percent of homeowners that really don’t know what’s going on with their home’s value (and don’t want to know). You want to make a solid financial decision and make a plan that will allow you to ride out the bumps in the housing market with minimal worries. That means doing some research before buying a house.

You don’t need to be a real estate expert, but it’s worth your while to learn some of the factors that contribute to a house’s value — including the fact that if there is a downward trend among housing prices in a certain neighborhood, it applies to all the houses in that area. Your home-to-be will not be an exception, unfortunately. But there are also other factors that contribute to the value of a home.

A real estate agent in my area has been running a TV commercial telling prospective buyers that just because other parts of the country are having housing market problems not to worry about. “You wouldn’t want a weather report for the whole country,” this agent announces, “So why do you listen to national real estate news?”

Despite my belief that now probably isn’t the best time to be buying in our real estate market, the man does have a point. The housing market in New York City has some major differences from the housing market in Albuquerque. Not all housing markets are struggling, and not all housing markets are going to have the same rate of recovery.

How do you know when your housing market will recover?

Being able to time a home purchase is crucial — you want to get the best deal, but you also want to make sure that your situation will be comfortable after you buy the house. The same is even more true if you’re trying to sell a house. It may be difficult to sell your house at what you consider a reasonable price right away. If you know a little more about your local housing market, you can decide whether it’s worthwhile to wait to sell your house.

While there is plenty of data that you can use to try to decide on what your local housing market is going to do next, there is one statistic that makes it simple: the number of for-sale homes. This number is usually measured in months — the number of months it would take to sell all the homes on the market at the current sales rate. As a rule, a larger number — more than a few months — means that the housing market in your area is weaker. Usually, it means that sales are slow. It can also mean that a large number of houses are going on sale, but that occurs less often.

If you want to do a back of the napkin calculation to determine if your area is starting to recover, just compare the last several months’ numbers. You can get those numbers from your local realtors’ association. Try searching Realtor.org if you aren’t sure where to start.

Looking over the numbers and checking for an upward trend isn’t a great statistical analysis, admittedly. If you have the time, taking a close look at some of the other numbers you can get from your local realtors’ associations, as well as the more professional statistics. The purchase or sale of a house is a big deal — you want to have as much information as possible. The number of for-sales homes is really only a starting point — a general idea of whether it’s time to start doing that more in-depth research or if you will want to wait a few more months before moving forward on your real estate plans.

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When you sell a house, an office building or any other type of real estate, you usually wind up handing
over 6 percent of the final price to real estate agents. That money is divided between the buying and selling agents. If you’re buying property, you don’t officially have to pay either agent, but that commission will drive up your buying price.

It used to be that the only easy way out of dealing with these fees was to buy and sell through your cousin the real estate agent. But this week, the U.S. Department of Justice informed the National Association of Realtors that they need to change a few of their policies. Specifically, the judgment requires that the NAR offer online real estate brokers the same consideration as other real estate agents.

Up until now, real estate agents listing a house with the various services that help agents connect buyers and sellers could choose to exclude online brokers. They did so because online brokers, such as ZipRealty, have reduced commissions. The DoJ decision found that refusing to work with online brokers prevents consumers from saving money. Essentially, the NAR must give online brokers access to over 800 multiple listing services on the grounds of anti-trust concerns.

There are plenty of ramifications for both buyers and sellers after this decision. Sellers using online brokers may be willing to accept lower prices, as long as they don’t have to put a full 6 percent of the price towards commissions. And since the number of people using the internet to find new homes continues to rise, buyers may find more homes available on their favorite real estate brokerage site. The immediate effects will be limited, I think. There are a few other reasons that houses are staying on the market in most areas and online brokers won’t change that. Overall, however, I think that consumers will get a much better deal on both ends of real estate sales from here on out. They even have a better opportunity to find the perfect piece of real estate, considering that online brokers have innovated new real estate search techniques that the average agent just can’t compete with.

What about real estate agents? I think that there might be some changes in how they do business. Buying agents, especially, might need to consider selling their services for something other than a commission. Xin Lu on Wisebread has a great post that points out the flaws in the commission arrangement, and she has me convinced that changing the compensation scheme might make buying agents offer better service. Real estate agents are looking at a new world. They’ve managed to avoid changing their way of doing business for years, but the DoJ’s ruling has introduced a whole new level of competition into the industry.

Photo — Chesnutt

Many first-time home buyers go shopping for a home thinking that they’ll find the perfect house and live in it happily ever after. It just doesn’t work that way. Even if a member of your family doesn’t get a job halfway across the country, it’s likely that you may want to change school districts, find a home with different amenities or move closer to family. Simply put, odds are that you’ll move at least once every five years.

As you look at homes, think long and hard about whether you’ll be able to sell it later on. For instance, is the design dated? There are plenty of homes that just scream “1970s” when you walk in — you might like that aesthetic, but it’s going to be harder to sell, without significant changes. (The current seller may be finding out just that, as well.)

A key question is whether you’ll need to do significant work on the house after you’ve lived in it for five years, or so. If the kitchen is brand new right now, it probably won’t need much effort to get it ready in a few years. But if the kitchen is already starting to seem a bit dated — older appliances, cabinets showing some wear — you may need to prepare yourself to spend some money down the road. You may be planning for such a remodel anyhow, for your own use of the kitchen, but a fairly new kitchen is practically a requirement when you plan to sell.

There are certain amenities that may be a must have today, but will make a house harder to sell down the road, as well. Consider the bathtub: there have been plenty of trends, such as whirlpool tubs, when it comes to bathtubs. And there’s plenty to be said for whirlpool tubs — they can be a nice luxury. But it’s much harder to sell a home with a whirlpool tub these days. Parents worry about their children’s safety, efficiency-minded buyers worry about the amount of water need to fill the tub, etc. You can always change out a tub down the road, but these sorts of amenities cost money, both to install and to remove.

Selling your future home shouldn’t be your primary concern when you are house hunting. However, it is a factor that you should take into account, just as you consider your wish list of amenities
in your new home: you may be willing to make significant changes to a house to make sure it meets your needs. Are you willing to make that level on investment in order to make sure that it also meets the needs of prospective buyers down the road?

As you prepare to go house hunting, there is one tool that I can’t recommend enough: a digital camera. Odds are that, during your search for the perfect home, you’ll look at enough houses that they’ll quickly start to melt together in your mind. Photographing a house thoroughly can help you remember which house had the gorgeous wood floors, and which needed new carpeting.

You don’t need a big expensive camera, but it may be worth investing in a large memory card: if you’re checking out several houses in a day, you may want to take lots of photos. As long as your camera has a flash, though, it should work just fine. The flash is especially necessary with an empty house — without plenty of light, your camera may not record all the details of a house. And you should be planning to record details: something small, like the placement of a closet, can be a deciding factor between two houses.

Beyond taking pictures of features that stand out in a house, you’ll want to make sure to get clear shots of anything that would need to be repaired — this sort of information is crucial if you do decide that you want a particular house. You may be able to get the sellers to agree to make repairs before turning the house over to you, of you may be able to convince them to accept a lower price for the house. You will do later walk-throughs in order to ensure that you’re getting a house in good condition, but noting such issues now can save you both time and money in the long run. There are plenty of home owners that had to struggle with previous owners to get even small problems repaired.

As you visit each house, start by taking a picture of the house number or address, so that you can tell where pictures of one house end and the next start. You may always want to take a few pictures of the surrounding houses and areas, just so that you have a memory aide when you start trying to narrow down your selection to one house.

Not all sellers will be comfortable with you taking photos of their homes — even if it’s a house they’re in the process of selling. It is, of course, polite to ask, and, if they ask you not to take pictures, you should refrain from doing so. Some real estate agents may be able to provide you with pictures of homes you are interested in, as well, which can save you some effort. However, those photos are usually shot in such a way as to make a house look as good as possible. A seller may not be trying to hide something, but, as a responsible buyer, it’s up to you to look for (and record, when possible) any potential problems with a house.

Hunting for a house — the right house — can be beyond stressful. You may have a whole list of criteria, from schools for your children to commuting options to get to work. And if you don’t get it right, you can be stuck. Once you’ve bought a house and moved in, you’ll be looking at a painful financial situation if you want to move right out again.

While you are looking at houses, you need to focus on the pros and cons of each individual property, rather than focusing on more general issues. To remove some of the worry of house hunting — and save money in the long run — complete these four steps before you even look at a single ‘for sale’ sign.

1. Get preapproved. Preapproval for a mortgage means that you know exactly the amount of money you can spend on your new home. You won’t waste time  and effort on homes out of your price range if you know just what sort of mortgage you can get. Furthermore, many people don’t know their credit score off the top of their heads, let alone the amount a lender will give them for a mortgage. That includes me, by the way. Rather than guessing, you should know.
2. Make a wish list. Before you start looking, it’s worthwhile to make a list of exactly what you’re looking for. Dream big: list all the qualities you want in a home, and then prioritize. You might also want to note which items on your list are things you can change in a house that meets most of your other needs. I, for instance, have a preference for energy efficient homes — but I can make the average house more energy efficient with a little time and money.
3. Know the market. There is an amazing amount of real estate information online for every zip code in the country. Do some research: recent sales prices, neighborhood statistics, market trends — even where the local landmarks are in relationship to your preferred area. Even if — especially if — you are unfamiliar with the area in which you’re looking for a home, you should research your potential neighborhood thoroughly. You might even go to the effort of contacting people living in the area to get their impressions of specific locations.
4. Discuss your expectations with your agent. If you are working with an agent to find your new home, you should do your best to tell your agent exactly what you are looking for in a home. Agents want the process to move as smoothly as you do, and if they know your spending limit and what you are looking for in a home, they’ll avoid showing you houses that don’t meet your needs. Both you and your agent can save time with a little communication.