USAA

These days, with national median existing-home prices down nearly 15% to $170,300, from January 2008 to January 2009, sellers put up "for sale" signs with trepidation. Buyers with good credit ratings hit the house-hunting trail with glee. Others happily stay put, focusing on making mortgage payments and upkeep. What's right for you?

Buy

If you have good credit, now may be a great time to buy.

What You Need:

• Steady income source.
• Good credit. Credit scores of mid-700s or higher get the best loan rates.
• A down payment. Conventional loans require at least 5% to 10% down these days, with some banks requiring up to 20%.

What to Do:

• Research the market. Real estate websites and a knowledgeable real estate agent make it easy.
• Be realistic about what you can afford. That's what many subprime borrowers didn't do. Some believed unscrupulous lenders who approved them for unrealistic amounts; others didn't take time to understand the terms of their loans.
• Get pre-qualified. This status can give you negotiating power.
• Educate yourself. If you don't understand what a lender is telling you, ask him or her to explain it until you do. USAA mortgage representatives are noncommissioned real estate consultants who can offer unbiased advice.
• Understand insurance costs. "Have enough insurance to rebuild your home," says Jeanne Salvatore of the Insurance Information Institute (III). "If you don't, you could find yourself underinsured."

USAA offers homeowners coverage that provides an additional 25% above the dwelling's insured value.

Sell

In this market, it's unlikely you'll sell for the highest price. But if you must:

What You Need

• Strong reason to sell — a job transfer, permanent change in station or divorce. Empty nesters who want to downsize should wait until the market recovers, and newlyweds may need to settle for the bachelor pad while they look.
• Patience. Average selling times vary depending on where you live and sales prices in the area.

What to Do:

• Price it right. Go online or ask a real estate agent for today's worth. "Don't listen to your cousin, aunt or neighbor who sold two years ago," says Pat Vredevoogd Combs, past president of the National Association of Realtors (NAR).
• Spruce it up. Clear clutter, update and make repairs. Consider a home equity loan for major repairs, but make sure you'll get the money back from the sale.
• Offer incentives. Offer to pay for the buyers' closing costs, moving expenses, appliances or upgrades. "Most buyers can pay the mortgage costs; it's the upfront costs that are troubling," says Marc Savitt of the National Association of Mortgage Brokers. "You want to be able to help the buyers get in."
• Get help from the pros. USAA members can rely on a network of certified real estate agents through the USAA MoversAdvantage program and qualify for a cash-back bonus of up to $3,100 when buying and selling.

Hold

Staying put? Stay on top of maintenance or invest in improvements. "Get ready for when the market turns," says NAR's Combs. Review mortgage terms and insurance coverage, and track mortgage rates to see if refinancing makes sense.

What You Need:

• Reason to stay. You plan to live in your home for at least two more years, building equity.
• Capital. You may need to draw on savings or tap an equity line of credit to pay for maintenance, repairs or upgrades.

What to Do:

• Get everything in working order.
• Renovate, replace or update. Lay new carpet, repaint walls or redo a bathroom. Remove popcorn ceilings or replace dated light fixtures or appliances.
• Improve energy efficiency. Insulate walls, plug wind leaks and use compact fluorescent light bulbs.
• Review insurance. Make sure your homeowners insurance is current. "If you've made any improvements to the home, keep your insurance coverage up to date," says III's Salvatore.
• Refinance. Mortgage rates are hovering in the low-5% range nationally. If you have an adjustable rate or a balloon loan, now is optimal for refinancing to a fixed rate. If you have a fixed rate above 6%, you might save by refinancing now, too.

Want more information? Watch USAA's webcast; Buy, Sell or Refinance? Ask the Experts.

About USAA

USAA, a diversified financial services group of companies, is among the leading providers of financial planning, insurance, investments, and banking products to members of the U.S. military and their families. For the past three years, BusinessWeek magazine ranked USAA among the top two "Customer Service Champs," highlighting our legendary commitment of providing highly competitive financial products for 6.8 million members. For more information about USAA, or to learn more about membership, visit usaa.com.

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