Don’t be tempted to buy a great house in a bad neighborhood unless you can see signs that the neighborhood is changing for the better. Future buyers will not be willing to pay top dollar for a house surrounded by fixer-uppers.

Decide what you want in a neighborhood before looking. If it’s important to have excellent schools nearby, don’t look in areas where your kids will have a long drive or bus ride to school.

Safety first

How safe is the neighborhood? Be sure to check it out at night and on weekends. Neighborhoods that may seem safe during the day can change when the sun goes down. Also look around you. Are your neighbors’ homes and gardens well maintained or are there rusted cars in their backyards?

Urban/Suburban?

What amenities do you need nearby? If you’re looking for parks, walking trails and recreation centers, a suburban location is for you. For the local restaurant, bar and theatre scene, check out downtown properties.

And be sure to ask your sales agent about any likely changes in zoning, new schools to be built or recently approved projects that could have a negative impact on the neighborhood.

As baby boomers look to downsize and homeowners trade luxury for function, there is renewed interest in smaller homes.

Eighty percent of 1,300-plus real estate agents surveyed in 2011 said that baby- boomer clients aged 54 to 64 are interested in smaller homes. Saving money and living more simply were among the reasons for the interest.

A recent study by the U.S. National Association of Home Builders showed that the economic downturn has altered the landscape of housing.

The study predicted that by 2015, homes will be 10% smaller than the average single-family home in 2010.

While homebuyers may be looking for smaller residences, they’re not interested in sacrificing functionality.

Instead, they’re trading luxury amenities for practicality.

According to architects surveyed by the American Institute of Architects, buyers are losing interest in spaces such as home theaters and exercise and game rooms and are embracing spaces like home offices and mud rooms.

Aging baby boomers will also be looking for features to make their lives safer and more comfortable. Baby boomers, more than any generation to date, are looking for homes that have been adapted to their needs instead of making the move to retirement homes.

The two- or three-story single-family home may also be on its way out, as boomer homebuyers launch their search for an entirely different type of housing, offering a maintenance-free lifestyle.

This important demographic is looking closely at options such as condominium apartments or bungalow communities. Many are also considering rental units.

Boomers aren’t alone in pursuing smaller homes. Young people and immigrants will also continue to drive demand in the future.

Even the casual HGTV watcher will be familiar with “granite obsession.” Picture this: A real estate agent is showing a couple a house that has great curb appeal in their chosen neighborhood, at a price they can afford. It’s perfect. Or is it?

“Hate that fixture,” the husband says, as the couple checks out the dining room.

They pause in the kitchen.

“This has to be completely redone,” he says. “No granite countertops.”

She agrees. The husband and wife nod knowingly at each other, and the real estate agent, who has heard it all before, says to himself, “Granite obsession.”

Despite the home’s obvious advantages, the couple can’t see the forest for the trees … or rather the house for its décor.

Instead of obsessing over paint colors, fixtures and granite countertops, the couple should be asking their real estate agent about the neighborhood; discussing recent energy-saving upgrades and the home’s electrical system; checking for leaks or cracks that may signal a roof repair or foundation problem; and deciding if the floor plan and room sizes will meet their lifestyle needs.

The couple should ask if window coverings are included and if the appliances are in working order. And even if these are not to their tastes, the couple will save a lot of money if they can live with the status quo and not have to buy new appliances, fixtures or drapes immediately.

Got questions?

Ask your real estate agent. He or she can recommend home inspectors, contractors, designers and others you might want to ask for a second opinion.

But don’t hold out for granite, hardwood or high-end appliances. You may never get a second chance at your dream home.

1. Listen to your real estate agent. He or she views hundreds of houses a year and knows what works.

2. Watch the trends and incorporate them in simple, effective ways. In 2012, buyers will be looking for extra storage and great laundry rooms. Declutter all your closets and add inexpensive but attractive storage in the laundry area. Fresh paint and attractive baskets can go a long way.

3. Position one of today’s colors – any shade of blue from cobalt to turquoise, for example – against neutral walls, either by painting an accent wall or by adding hints of color with accessories.

4. For accessories, try light woods, brass and stone.

5. Switch down your lighting – dimmers create a warm, romantic mood in bedrooms and dining rooms.

6. Hardwood floors are still number one, but sisal and seagrass carpeting are becoming popular.

7. White or off-white kitchen cabinets are still in. Painting cabinets may be labor intensive, but you may avoid that “dated kitchen” label.

8. Stainless steel appliances remain popular, but building them in to match kitchen cabinets is very now.

9. Move out all but essential pieces of furniture. Buyers want to imagine their possessions in your home.

Sellers

• Sellers should be aware that there’s a lot of competition for buyers in the spring. That means sellers should do everything possible to differentiate their home from others, including the following:
• Polish windows and floors, rake the yard, mow the lawn, and add flowers in containers.
• Wash blinds and curtains and have carpeting cleaned.
• If a seller has spent the winter renovating to sell, new pictures should be taken to show the renovated space to best advantage. Be sure to add the new information to the feature sheets and advertising of real estate agents.
• Consign dark linens and towels to storage and add bright or pastel accents in baths and bedrooms.

Buyers

Buyers should have a good idea of what they want, how much they can spend and the neighborhoods they’re interested in. Buyers should also:

• Have a network of experts in place, such as a real estate agent, lawyer, home inspector and mortgage broker.
• Obtain a copy of their credit report, and if there are errors, clear them up.
• Approach several lenders for preapproval.
• Decide before shopping for a home the most they’re prepared to pay, and resist the urge to pay more.

There is an intricate maze of details that need to be carefully navigated.

Following are five obstacles that first-time buyers have to overcome when looking to buy a home:

Down Payment:

Saving enough for the down payment is not sufficient. Closing costs must also be considered. Closing costs are additional fees such as the lawyer’s fees, escrow charges, appraisal fees, financing fees and utility adjustments. A good rule of thumb is 2% of the purchase price will cover the closing costs. So for a $200,000 home with a 5% down payment, you would require $14,000 to cover both the down payment and closing costs.

Mortgage Preapproval:

Many first-time home buyers overlook the preapproval process. This mistake can cost you your dream home. Visit a mortgage professional to see what kind of mortgage you qualify for and closely examine the actual cost of the money you must borrow to purchase a home.

Use a Real Estate Agent:

Some home buyers think they can go it alone. Buying a home is a complex legal process, and buyer representatives have the knowledge and know-how to make your home-buying experience a happy one.

Know the Difference Between What You Need and What You Want:

It is fine to dream big, but the home-buying process can be very frustrating when you have a $200,000 budget and $500,000 taste. It is essential to the buying process to identify what your home must have and what you would like it to have.

Believe in Yourself:

It seems that when you are buying your first home, everyone has an opinion about the purchase. This can be confusing because unsolicited advice clouds your decision. Believe in your ability to assimilate the facts, look at the property and decide what to buy.

In the bathroom, they love glass and stone finishes with brushed nickel faucets and floating vanities. And don’t forget the open floor plans that blend kitchen, dining room and family room into a single open space. Seducing today’s buyers is almost a necessity in today’s real estate market. But how far should you go to cater to buyers’ wants?

It depends. Unless you’re selling a luxury property, you don’t have to buy a professional-grade stove. However, you may want to consider trading your outdated avocado appliances for stainless steel and buying an inexpensive island on casters to make the kitchen feel more modern.

Kitchens and bathrooms sell houses, so it makes sense to spend the majority of your renovation dollars to upgrade these spaces. In the bathroom, new fixtures, a soft color for the walls and sconce lighting will make a world of difference. Add fluffy white towels, flowers and candles, and you have a spa that buyers will love.

A fresh coat of neutral paint is always a cost-effective solution. And an accent wall can make a space look bigger, warmer and more up to date.

Carpeting is out and exotic woods and travertine floors are in. However, your buyers will likely be as impressed with less-expensive flooring options.

It’s up to you to prepare your home for sale.

While your real estate agent may suggest, recommend and even cajole, selling your home is your job, and no one else can do it for you.

You have only one chance to make a first impression.

It’s so true.

A recent survey indicated that more than 60% of buyers knew the property was for them the minute they walked in the door.

So make sure you put a lot of your effort into that first impression.

Cut the grass or shovel the snow to make it easy to get to your front door.

Repair stairs and railings and remove all the usual clutter.

For a great first impression, paint the front door a color that coordinates with your trim and add new hardware.

De-clutter the foyer and make it a grand entrance. A mirror over a hall table reflects light and gives your entrance a finished look.

In the living areas, remove some of your furniture and paint the walls a neutral color to give them a spacious feel. Use lighting, even in the daytime, to brighten dark corners. In the bedrooms, organize your closets to make them seem roomier.

Kitchens and bathrooms can sell – or not sell – your home. If you can afford it, replace outdated appliances and fixtures. If you can’t, go for a good first impression with uncluttered, sparkling-clean counters.

In the bathroom, new fluffy towels and accessories may help visitors overlook the dated vanity.

While it’s listed, your home should always be kept clean, tidy and smelling fresh. Help your real estate agent and you’ll find that between the two of you, 60% of buyers may just find your house is “the one.”

Use a Buyer’s Agent: A buyer’s agent can help you navigate a rapidly changing marketplace and let you know how to maximize your real estate dollar.

Get Preapproved for a Mortgage: Sitting down with a mortgage professional before you begin your search will help refine what you are looking for. This will allow you to set your budgets and narrow your search criteria. Note that a mortgage prequalification is not the same as a preapproved mortgage.

Make a List of Your Needs and Wants: Understand what you need and what you want. Wants are the things you can live without but you would like. Sitting down with your real estate agent will help speed up the home-buying process.

Invest for the Long Term: Buying in a down market offers affordable prices and greater home selection. Long-term investment in real estate is the surest way to maximize your initial investment.

Be Patient and Ask Questions: Down markets allow home buyers to be more patient. Surplus housing inventory means that there are fewer buyers competing for homes, allowing buyers to ask questions and ensure that they are selecting the home that is going to be right for them.

With real estate bargains in much of the United States and with market improvement across the country, this is the ideal time to jump into the housing market.

But when you’re facing down a determined seller or trying to figure out what to offer, it literally pays to have a buyer’s agent on your side.

Real estate is all about negotiation.

On one side there’s the seller and his or her listing agent, who is bound by a legal agreement to represent the seller’s interest.

On the other side is the buyer – you – who wants to walk out a winner,

having paid a price you’re comfortable with for a home you love.

To get there, you’ll need comparables to establish a fair price; an educated perspective on the local real estate market; connections to home inspectors, lawyers and mortgage brokers; and someone who is bound by a legal agreement – a buyer’s agreement – to represent your interests and yours alone.

That would be the buyer’s agent. He or she puts you on level ground with the seller.

In tough negotiations with multiple offers, you need someone who will advise on strategy and is required by law to treat everything you share in confidence.

In “as is” situations or home inspections that turn up expensive surprises, you need a professional to advise you.

Even when things are going smoothly, another perspective is often important.

An agent can also negotiate unemotionally and professionally on behalf of the buyer.

Effectively, your buyer’s agent is your new best friend. Don’t leave home without one.