When real estate hits tough times in a particular area, it is sometimes referred to as a "buyer's market." When prices are high and there is much competition for available properties, the situation is known as a "seller's market." Not many real estate experts would claim that current conditions reflect an advantage to sellers, and current homeowners may be affected by tough times in the real estate industry in many ways that aren't readily apparent.

Many home buyers took advantage of easy credit, no-down payment mortgages and other perks of an explosion in real estate buying between 2000 and 2005. For about half of a decade it was often fairly to secure a new mortgage for the purchase of a home. But the mortgage industry has changed dramatically, and it's no longer as easy to get credit as it was in the early part of the decade.

For homeowners looking to sell, today's market is much tougher. A potential buyer is screened more carefully, and, according to the United States Treasury, sales of single-family residences are down 25% from their peak in 2005 (see article).

However, this does not mean you should avoid putting your home on the market. Instead this figure should inspire home sellers to make their properties as attractive to a potential buyer as possible. Any repairs, remodeling, or upgrades you may be planning for your home could make the difference in making the sale, so it's best to consider the state of your home carefully before committing it to market.

A buyer examining your asking price and their available interest rates with a home loan calculator may feel the monthly mortgage payments are within their budget. And if your home includes some recent upgrades or perks such as an energy-efficient modification like a solar water heater, those monthly payments may seem even more attractive.

Another critical area for current homeowners looking to sell is obtaining an accurate property appraisal. In a buyer's market it is more difficult to justify a higher asking price without backing it up with the right assessment of what the home is worth. If you feel that your appraisal doesn't accurately reflect the true value of your home, or if the most recent appraisal is out of date thanks to some home improvements, get another estimate on the value of your home before committing to a selling price.

Current market conditions may also affect a homeowner's chances at getting refinancing. Are you nearing the end of your introductory fixed interest rate on your mortgage? If you are about to transition into an adjustable rate mortgage, your first inclination will be to call your bank to request refinancing. Some industry experts report banks refusing to discuss refinancing terms in some cases unless the borrower is already late on payments because of high interest rates. These reports may sound alarming, but no two banks conduct business the same way. Don't hesitate to contact your loan officer to discuss refinancing if you feel the need.

Some home loan holders trying to take out home equity loans are being asked to justify the appraisals of their property—even in cases where the borrower is judged to be a good risk with a high credit score and plenty of equity. If you are considering a home equity loan you may be required to provide supporting evidence from the facts and figures of your specific market area to get approval.

Typical factors such as debt-to-income ratio, on time bill payments and other credit issues also play their part—you need to be as risk-worthy as possible to get the right consideration for a home equity loan. Double check your current status by requesting a copy of your credit report, and use a home loan calculator to see how much you can actually afford to borrow and pay in addition to your current monthly bills. Go to your loan officer prepared to show you can indeed afford such a loan.

Be prepared—do your own homework about local market prices for properties similar to yours and show why your home warrants the same consideration or better. Does your home have significant improvements compared to others like it in the same age and design? Does it hold its own against similar properties? These are questions you should be prepared to answer in order to get your home equity loan approved.

The mortgage industry experiences ups and downs the same as any other sector. Current conditions may make it more challenging to sell or refinance your home, but you can make your property more competitive with some extra research, an accurate appraisal, and the right improvements which can make your asking price much more competitive.

See also: Home loan tips and advice