- >All the right moves: Profit in 2008

The 22 best ways to keep safe, spend smart and make your money grow in the year ahead
Wednesday, January 02, 2008

Tumbling home values. Soaring energy prices. A topsy-turvy stock market and a gazillion other financial worries, not the least of which is whether we'll spend the coming year mired in recession.
Considering all the black clouds hanging over the economy, you probably think there's no way you can really expect to prosper in 2008. It will be all you can do just to hang in there. If that is what you're thinking, we're happy to tell you that you're wrong. There will be plenty of opportunities to
make money next year - yes, even in real estate - as well as ways to insulate your finances from the most serious economic challenges ahead. Your home The real estate slump isn't going away soon, so whether you're buying, selling or staying put, deal with it.

Make your house look like a bargain
For sellers: Forget what the ugly house next door sold for last year or even what comparable homes are listed for today. Instead, use the going price of houses that have recently sold as a guide - then price your home even
lower so it looks like a great deal. (Ask your real estate agent for help with this assessment or go to homegain.com or zillow.com for guidance.) Best case: Your aggressive pricing attracts more than one bid, pitting buyers against one another and ultimately lifting the final sale price.

Pay a little to look good
For sellers: You'll pay around $150 a month for a 10-foot-by-15-foot storage unit, a piddling amount compared with the $5,000 more your house might fetch or the three months faster it might sell.
The quickest, most effective way to increase curb appeal: Apply a fresh coat of paint, says Dave Liniger, co-founder of Re/Max International, the real estate franchise.

Offer the right incentive
For sellers: Covering closing costs is a biggie because it may help a buyer who's short on cash pay for a home he otherwise couldn't afford. Or you might offer to kick in homeowners association dues or provide a home warranty covering repairs for the first year.

Lowball your offer
For buyers: If ever there was a time to drive a hard bargain, this is it. Don't be distracted by small stuff like whether the current owners will leave behind their appliances and window treatments.
Focus instead on what's really important: getting the lowest price. Do a little homework and find out what comparable houses have sold for lately. Then start the bidding at 10% to 15% below that recent sale price. Note: This strategy works best if there are several homes on the market in your area around the same price.

Look like a good risk
For buyers: You'll have an easier time getting approval from a lender if you have enough money set aside to put down at least 10% to 15% of a home's purchase price (no- or low-money-down deals have largely disappeared).You'll also need plenty of documentation to prove you can afford a home in the range you're looking at. What lenders will want to see: Your total debt payments shouldn't eat up more than 36% of your income, says Keith Gumbinger of HSH Associates.

Don't jump at a jumbo
For buyers: These days $417,000 is a magic number: If your mortgage exceeds that amount, it's
considered a jumbo, and your interest rate will be about six-tenths of a percentage point higher
than you'd pay on a standard 30-year fixed-rate loan vs. just two-tenths of a point normally.
The gap expanded last summer when the credit crunch hit, and it's likely to remain unusually wide next year. To avoid paying the extra interest, try to come up with a big enough down payment to bring your mortgage below $417,000. Or simply hold out for a less expensive house. Getting a $400,000, 30-year fixed-rate loan instead of a $425,000 jumbo will save you about $325 a month
and more than $92,000 in interest over the life of the loan.

Put down your ARM
For owners: If you have an adjustable-rate mortgage that's due to reset next year, consider refinancing into a fixed-rate mortgage now to avoid future payment shock. Similarly, if you have borrowed heavily against the equity in your home and are feeling squeezed, refinance
your home-equity loan and mortgage into one new fixed-rate loan. A $200,000 mortgage at 6.5%, plus a $100,000 home-equity loan at 8.2%, works out to monthly costs of about $2,500. Roll that entire $300,000 into a 30-year fixed-rate loan at today's rates and your payment will be $1,900 or so, a savings of about $600 a month

Know your home's future
Is a neighborhood you're interested caught up in the housing bust? How do the schools rate?
This information is a few clicks away, click here for public school reports. Whether you're thinking of moving to a new city or just want to know more about what's up in your own backyard, the Web lets you see a town from countless angles. Click here for that information

Scope out the houses
You can start your neighborhood search from miles up at Trulia.com. Type in a town and you can choose a satellite view or street map of the place. You can also choose a "Heat Map" that breaks down the city by neighborhoods and shows you how hot (red) or cold (green) each area is, based on prices, sales or popularity among Trulia users. Click on the map to see homes listed for sale in each nabe. You can also ask other users a question about the area - or just read the discussions.
Curious about the value of your home or the neighbors'? Then check out the similar Zillow.com for an estimate of every house on the block. REMEMBER IT’S AN ESTIMATE NOT MARKET VALUE Satellite maps give you a great look at roofs and backyard pools, but at Microsoft's Maps.Live.com you can often get a bird's-eye view - that is, it's at an angle, so you can see the sides of houses too. And in some neighborhoods Maps.Google.com can even give you a 360° street-level view. (It's cool and a little creepy.) Walkscore.com shows in one screen all amenities - such as coffee shops, drugstores and schools - within walking distance of an address, and scores the neighborhood for "walkability."

Check out the schools
Standard & Poor's SchoolMatters.com has all the basic data on public schools - test scores, school and district demographics - in a clean, easy-to-use interface. NOTE: YOUR LOCAL MULTIPLE LISTINGS SERVICE’S DATA WOULD BE MORE ACCURATE. To request that data click here The not-for-profit GreatSchools.net is less streamlined but does more. It has info on private schools, its own school-rating system and its own writers. Both sites also have parents'
reviews of schools, though GreatSchools seems to have more to read now. Search for local online discussion forums at NeighborhoodBlog.com Parents' groups are often the place to get the real block-byblock 4-1-1 and can be a great way to meet new people. Find groups by searching on keywords like "parents," "kids" or "SAHMs" (as in "stay-at-home moms"). You may have to send a message applying for membership to get in on the discussion.