There are times when the economy is brisk and everyone feels confident about his or her prospects for the future. As a result, they spend money. People eat out more, buy new cars, and they buy houses.

Then, for one reason or another, the economy slows down. Companies lay off employees and consumers are more careful about where they spend money, perhaps saving more than usual. As a result, the economy decelerates even further. If it slows enough, we have a recession.

During such a time, fewer people are buying homes. Even so, some homeowners find themselves in a situation where they must sell. Families grow beyond the capacity of the home, employees get relocated, and some may even find themselves unable to make their mortgage payment - perhaps because of a layoff in the family.

When the supply of available houses is greater than the supply of buyers, appreciation may slow and prices may even fall, as happened in the early eighties and the early to mid-nineties.

If you are lucky enough to purchase a home during a slow period, you can be reasonably certain the economy will begin to show strength again. At times, real estate values may even surge drastically. In many regions of the country, this is precisely what occurred in the late eighties and nineties.

One problem with attempting to time your purchase to the business cycle is that no one can accurately predict the future. Another challenge is that interest rates are generally higher during a depressed market and income may not be keeping up because less overtime is available and bonuses or commissions are down. With higher interest rates and lower earnings, fewer people can qualify for a home purchase than in more prosperous times.

Plus, "timing the market" generally works best for first-time buyers. People who already have a home usually need to sell it in order to buy their next one. If a "move-up" buyer wants to buy a home during a depressed market, that means they usually have to sell one during the slow market, too. If a seller wants to sell his home to take advantage of a "hot" market when prices are fairly high, they generally have to buy their next home during that same hot market.

Finally, the business cycle can change over time. Since 1983, the USA has had two fairly long expansions with only a slight recession in between each. You would not want to wait nine years to buy a home. You could miss out on a substantial amount of appreciation by waiting, and end up paying much higher prices.

The USA has one of the most competitive real estate markets in the world, therefore banks are also attempting to stimulate the market by offering great mortgage deals, in the hope of either: attracting first time buyers, or creating a switch mechanism within the mortgage market. (by offering discount interest rates or a shorter payback period).

Whether you are purchasing your first home, refinancing, seeking to remove Private Mortgage Insurance, or are considering selling your home, you should start with a high quality real estate appraisal.

A legal document that pledges a property to the lender as security for payment of a debt. Instead of mortgages, some states use First Trust Deeds.

For a more complete discussion of mortgage banker, see "Types of Lenders." A mortgage banker is generally assumed to originate and fund their own loans, which are then sold on the secondary market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. However, firms rather loosely apply this term to themselves, whether they are true mortgage bankers or simply mortgage brokers or correspondents.

A mortgage company that originates loans, then places those loans with a variety of other lending institutions with whom they usually have pre-established relationships.

Insurance that covers the lender against some of the losses incurred as a result of a default on a home loan. Often mistakenly referred to as PMI, which is actually the name of one of the larger mortgage insurers. Mortgage insurance is usually required in one form or another on all loans that have a loan-to-value higher than eighty percent. Mortgages above 80% LTV that call themselves "No MI" are usually a made at a higher interest rate. Instead of the borrower paying the mortgage insurance premiums directly, they pay a higher interest rate to the lender, which then pays the mortgage insurance themselves. Also, FHA loans and certain first-time homebuyer programs require mortgage insurance regardless of the loan-to-value.

The amount paid by a mortgagor for mortgage insurance, either to a government agency such as the Federal Housing Administration (FHA) or to a private mortgage insurance (MI) company.

Many people will ask if it is essential to have good credit to get a mortgage. No, Mortgage brokers will specialise in helping consumers with all types of credit find a mortgage loan to meet their needs. Brokers will search their nationwide network of professionals and put you in contact with the one best suited to help you find the right type of home financing.

A real estate salesperson is more than just a "sales person." They act on your behalf as your agent, providing you with advice and guidance and doing a job, helping you buy or sell a home. While it is true they get paid for what they do, so do other professions that provide advice, guidance, and have a service to sell; such as Certified Public Accountants and Attorneys.

The Internet has opened up a world of information that wasn't previously available to homebuyers and seller. The data on listings available for sale is almost current, but not quite. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with an agent.

If you're selling a home, you gain access to the most buyers by being listed in the Multiple Listing Service (MLS). Only a licensed real estate agent who is a member of your local MLS can get you listed there, which then gets you automatically listed on some of the major real estate web sites. If you're buying or selling a home, the MLS is your agent's best tool.

However, the role of an agent has changed in the last couple of years. In the past, agents were the only way home buyers and sellers could access information. Now agents are evolving. Because today's home buyers and sellers are so much better informed than in the past, expertise and ability are becoming more important.

The real estate agent is becoming more of a "guide" than a "salesperson" your personal representative in buying or selling a home.

If your goal is to buy a home for it's resale value and the one you are thinking of buying in the older neighbourhood is at the upper end of values for that neighbourhood, then it may not be the wisest choice. If it is similar or lower in price to the others, then there should be no problem, because pricing should be considered in relation to the local neighbourhood and not compared to homes in other neighbourhoods (for the most part)

Plus, is it a neighbourhood on the decline, or are others going to be fixing things up, too, so that it is a neighbourhood that is improving? It could turn out to be a very good deal as long as you don't "overpay" because of the recent improvements.

Remember that you also buy a home for it's value to you as a "home," and that is something else you should consider. Which neighbourhood would you and your family feel most comfortable in?

Mostly because of the internet, a lot of things are changing, and Realtors are more willing to list properties for less than in the past, especially in a hot or steady market.

Here is the thing you need to keep in mind when negotiating agent compensation; there are normally two Realtors involved in each sale. The listing agent and the selling agent. The listing agent puts the sign in your yard and enters the property in the MLS. Sometimes extensive marketing is required and sometimes not. It depends largely on the market. Then there is all the follow-up work once the home actually sells.

However, the selling agent (buyer's agent) looks at homes in the MLS (Multiple Listing System) and decides which properties to show their clients. If the commission offered to the selling side is lower than customary, they might not show the property. Therefore, you will get fewer potential buyers previewing your house.

So think of compensation separately. Determine what you should pay your listing agent based on the amount of work you think they will do on your behalf, then determine what you think a selling agent should earn in order to make sure your property is shown.

Disclosure rules vary from state to state, but most require the seller to disclose any problems he knows about. However, the rules on disclosure vary according to whether the seller is an individual or a bank, and whether they are represented by an agent or not. Rules on disclosure are not as strict for bank-owned properties and FSBO's.

Normally closing date is stipulated within the contract agreed upon, however there will always be some leverage on pulling out of the sale or purchase of a property. Therefore be prepared for last minute problems, or even the collapse of the sale. Costs will still have to be met if the sale does not go through, however some costs can be claimed back from the removing party, however this must be stipulated in the contract.

Some real estate agents are members of the National Association of Realtors, which does have a code of ethics for their 720,000 members. It is located at http://www.realestateabc.com/codeofethics/

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