By Fred Hibbert

The current real estate market presents good opportunities for buyers shopping for a home in the Los Altos area and the greater South Bay.

Interest rates are as low as they have been in many years. Conforming loan limits are being raised, reducing the interest rates on larger, “jumbo” loans.

With spring around the corner, we expect an increase in the number of homes for sale. Sales prices have leveled off in some areas, and sellers are a little more willing to negotiate than they might have been a year ago.

However, even in this market, consumers need to be savvy to get the best deal possible. Why are prices down in one neighborhood but up in another? Should you wait to see if we are at the bottom of the market? Should you buy a foreclosed property in the slower areas of Santa Clara County, and how do you do it?

Here are some tips to help the process go smoother and ensure that you get the best value for your money.

• First and most important, don’t try to time the market. Trying to time the housing market isn’t any easier than trying to time the stock market. Real estate economists have been notoriously bad at predicting the future market.

Historically, down cycles in California real estate are relatively brief and shallow. Over the long run, prices in the Golden State have more than held their own with other investments, according to figures from the California Association of Realtors.

• Consider buying a “Real-Estate Owned” property from a lender, but be aware of drawbacks. The number of REO properties has increased in some areas of Santa Clara County. REOs can be a great opportunity for buyers to acquire a property at a discount. These properties are owned by lenders who prefer to be in the banking business and not the real estate business. They are often willing to sell a property at a lower price to get it off their books.

• Procure a prequalified loan commitment. Homebuyers need to determine how much home they can afford even before they start looking for a home. A buyer who is already prequalified by a lender is taken more seriously by sellers and is in a much better position to negotiate.

• Negotiate on the incentives. Some sellers in slower markets are offering a variety of incentives to buyers to move their properties – anything from homeowners’ dues to cash back for remodeling or even cars and vacations.

• Shop around, but not forever. Buyers generally have more time right now to look at properties and consider the best value for them. But well-priced homes in good condition in sought-after neighborhoods are still attracting strong interest from buyers. Many have been surprised to learn that the home they thought was all theirs is the subject of multiple offers. When you find the right home, it’s important to move quickly and be reasonable in your negotiations. This market can be a win-win for buyers and sellers.

Fred Hibbert is manager of Coldwell Banker Residential Brokerage’s Los Altos First Street office. For more information, call 948-0456 or e-mail fhibbert@cbnorcal.com.