Of course, you may have also heard or read that the entire world is about to file for bankruptcy. My buyers are also telling me they hear it’s completely impossible to get a mortgage, there will be 20 bazillion more foreclosures before this is all over, home values will continue to sink and it’s too risky to try to buy real estate.

So what is truth and what is myth and what is a buyer to do? That’s a lot to sort out, especially for first-time buyers who already have such a high learning curve.

For starters, understand that the fundamental definition of a buyers market is simply one where supply outweighs demand and as a result, prices drop. This in turn gives buyers the leverage, hence the “buyers market”. In a normal real estate cycle this would work itself out like it always has and after a period of readjustment (often called correction), the cycle would start to shift back into the sellers favor again and on and on we go.

The situation we are currently in is different mainly because historically folks have regarded the purchase of their home as one of the fundamentally great achievements of their lives, the most stable of all investments in their future and for future generations. The concept of the buyers market was built around these core principals of buying property, not the ones that brought thousands and thousands of folks into places like Florida and Las Vegas for the largest get rich quick scheme of my lifetime. Nor was it built on the concept that you buy a home so you can finally get that brand new SUV and 60 inch flat screen you have been wanting. Don’t even get me started on the irresponsibility of some lenders and government oversight, that’s another story!

For buyers who are thinking of buying for the right reasons, I always recommend getting in the game as soon as you can and this moment is absolutely no different. For most of us average, hard-working folks, real estate will always be the greatest long term investment we can make. In most parts of Massachusetts we are seeing a complete turnaround from the skyrocketing home values that existed throughout the first half of the decade. From a first-time home buyer perspective, this natural shift alone creates incredible opportunity to get into a town or a neighborhood they otherwise would not have been able to afford. That same opportunity exists for folks looking to “trade-up” to a bigger house or better school system, for example.

If you fit into this category you are educated and ready to make a sensible purchase! So where is the money going to come from? It’s true, restrictions have tightened quite a bit BUT if you look at how loose they became you will find that we are once again getting back to the historical way of doing things. You have to show that you earn a living, can keep up with your bills and haven’t already run up all your credit cards to the max and then you can only qualify for a loan that you can afford to pay back. For folks that fall into this category the money is out there waiting for you. A lot of commercial banks are still in a sticky situation but government loans have saved the day. For instance, these days I am getting most of my buyers qualified for government-insured FHA loans. The down-payment amounts are flexible, the interest rates are competitive, the mortgage insurance costs are lower and the money is flowing!

Sure foreclosures are part of the equation but the rows and rows of boarded up houses and for sale signs that we see on CNN just don’t exist around the Boston area. The bright-eyed, bargain hunters I have met with recently seem to change their tune fairly quickly once the foreclosure fantasy turns to brutal reality. In most cases the homes are very hard to get into, there is usually no heat or electricity, often they are filled with debris left behind or even worse the homes are missing the copper pipes, water heaters, appliances, etc. If all of that doesn’t sway you, buyers often only have a day or two to de-winterize, inspect, provide proof of funds, review the purchase and sale, and pray. And if the deal falls apart, which it often does, the buyer is out all that money for upfront costs and no closer to becoming a homeowner. I’m not saying the bargains and possibilities aren’t out there, just that they aren’t for the faint of heart and you do have to be ready to act immediately when one appears. A couple of weekends ago I saw a bank-owned home in the Malden, MA suburb of Boston that was one of those rare finds. The property had only been on the market for nine days and my buyers immediately jumped at the chance to make an offer. One quick phone call and we found out the bank was already reviewing five other offers. As we were leaving the property two more cars pulled up for showings. My buyers stood watching in amazement. I guess it really is a buyers market after all!