Home buying's all about compromise in today's market

Generally, it takes longer to sell homes this year than it did in 2006. This is primarily because the inventory of homes for sale has ballooned from the record-low inventories of recent years. When the listing inventory grows, buyers have more to choose from. They can hold out for what they really want without worrying about prices rising in the meantime.

Despite the trend, there are areas around the country -- like the Claremont area of Berkeley, Calif., or Pacific Palisades in Los Angeles -- where listings are in short supply. In these markets, buyers aren't content to sit back and wait for the perfect English Tudor or Spanish Mediterranean. They are willing to make compromises.

Rather than hold out for everything you ideally want in a home, be willing to drop some of your preferences. It's a good idea to write down everything you'd like to have in a home. Seeing the list can help you prioritize which items are the most important to you. Divide the list up into those items you must have and those that are discretionary. This way you'll be better prepared to make a decision about a listing.

Low-inventory housing markets tend to be fast markets. You may not have much time to decide if you want to make an offer on a property. So, it's best to be prepared. This includes being preapproved for financing.

It also means being able to quickly analyze a listing to determine if it includes enough of what you want and need. Even when there is a lot of inventory, the kind of house or condo you're looking for may be in short supply. So, you should be prepared to act on short notice.

A compromise that many buyers make is accepting a property that must be adapted to suit their needs. For instance, if you need a studio work space, a basement might qualify for a conversion as long as the house has plenty of storage space elsewhere.

Just make sure if you buy a fixer-upper that you have a good understanding of how much it will cost to make improvements. Use the inspection-contingency time period to collect as much information as possible about future renovation feasibility and costs.

HOUSE HUNTING TIP: Buyers who aren't willing to trade off property condition or location often find success if they broaden their search to include more than just one neighborhood. Buyers who won't compromise on location might consider renting.

Renting before buying makes sense for buyers who are moving into an area in which they've never lived before. If the inventory is low, it allows you to get acquainted with a new area while you wait for the right home to come along. You could find after living in the area for awhile, you'd rather live elsewhere.

It's difficult to buy long distance even under the best of circumstances. When the inventory is low, it may be impossible to buy within the timeframe you have in which to move. Although renting is rarely a first choice, it is far better than buying the wrong house.

It can be worthwhile even if you have to buy your way out of a lease. It would be sheer luck if the right listing came on the market just as the lease ran out. Plan to buy whenever the right property comes along.

THE CLOSING: Low-inventory markets tend to be competitive. Some buyers find they need to lower their price range in order to compete if multiple offers are sending prices significantly over the list price.