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From SmartMoney.com:

Is that a hair fracture in the buyer’s market?

Sellers for months have been slashing prices, making gratis home improvements and absorbing closing costs to get prospective buyers to bite. But a recent report by Zillow, the Seattle-based online real estate service, suggests negotiating power among buyers is starting to weaken — if only slightly.

According to the report, home buyers nationwide negotiated a median 2.9% off the final listing price in September, down a bit from 3% the previous month. Buyers’ negotiating power peaked in January when they were paying 4.5% less than the home’s last listing price, Zillow says.

…

So how can prospective home buyers maximize their leverage with sellers? Here are a few tips.

Make sure you’re fully preapproved for a mortgage. This means your lender verified your income, checked your credit report and approved you for a mortgage of a certain amount over a fixed timeframe. When a buyer has that preapproval letter in hand, “they become a more attractive buyer than others who don’t have that [and] they have a lot more weight,” says JP Endres-Fein, a realtor with Homes of Westchester in New York.

For more tips on getting preapproved, read our story here.

Get the home’s total history. You want to know how long the home you’re interested in has been on the block. Often times, a seller will work with one real estate agent or company that will list the home on its local Multiple Listing Service. If the home doesn’t sell, the homeowner will go with another company and lists the home separately.

Ask your realtor to pull the home’s total history – how many times the house has been on the market, for how long, if there was a price adjustment and what the starting price was, says Endres-Fein. The information should factor into your negotiation approach. “The longer the house has been on the market, the more that says to me it started out overpriced,” she says. “If the home is on the market for just a week or two, the seller will stay firm. They’re less likely to negotiate down.”

Ask about the seller’s timeline. Try to find out if the seller has a specific deadline. If they already bought a new house, are close to closing or have to move for a job transfer, they might be more amenable to negotiations. Just keep in mind that if you ask the seller or seller’s agent, you may not get a straight answer. They don’t want to necessarily give away a weakness. Endres-Fein suggests having your agent ask the person representing the seller a general question, like “Is there anything we need to know about the timing of the sale?”

Time the tax credit. If you’re hoping to take advantage of the newly extended home buyer tax credit, you’ll have more negotiating power now than later, says Jay Papasan, the vice president of publishing at Keller Williams Realty. Papasan expects many buyers will procrastinate and wait until the spring to get serious about buying in time for the credit. (The new law covers home purchases that are under contract by April 30, 2010 and closed by June 30, 2010. Read our story for more on the extended credit.)

Buyers will find the best deals with the least competition in December and January, traditionally the slowest months in real estate – and before a lot of other buyers have made the decision to jump in, Papasan says.

Meanwhile in a Reuters story also on FoxBusiness.com:

Sales of newly built U.S. single-family homes in October rose more than expected to their highest level in a year, data showed on Wednesday, pointing to a stabilizing housing market after a three-year slump.

The Commerce Department said sales jumped 6.2 percent to a 430,000 annual pace, the highest since September last year, from an upwardly revised 405,000 in September.

Analysts polled by Reuters had expected new home sales to climb to a 410,000 annual pace from September’s previously reported 402,000. The rise in sales pushed the supply of new homes on the market last month down to 239,000 units, the lowest since May 1971.

From FoxBusiness.com:

Why aren’t uber-low interest rates bringing more buyers into housing?

Generally mortgage rates and home buying move inversely. The lower rates are, the more buyers step into the housing market.

Even with today’s slightly better than expected read on new home sales, the trend has been poor. As the graph shows, rates and mortgage applications are both falling. The coupon on certain Fannie Mae notes fell below 4% yesterday as the Fed and institutional buyers keep buying the debt (albeit for different reasons). This implies mortgage rates should keep falling even from already historically low levels. But even low rates may not help a housing market suffering through a 17+% real unemployment and underemployment rate in America.

HomeGain.com, one of the first websites to offer Web-based free instant home values, announced that it has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey.

HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. HomeGain received responses from nearly 1,000 Realtors nationwide and configured a list of the top 12 do-it-yourself (DIY) home improvements that cost under $5,000 and benefit sellers most when they sell their homes.

According to the HomeGain survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase / 872% ROI)
2. Home staging ($300 cost / $1,780 price increase / 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase / 572% ROI)
4. Landscaping ($320 cost / $1,500 price increase / 473% ROI)
5. Repairing plumbing ($385 cost / $1,250 price increase / 327% ROI)

Cleaning and de-cluttering continues to rank as the top suggested home improvement (since the survey was originally conducted in 2000), recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”

Rounding out the top 12, the list of low cost, do-it-yourself home improvements includes: updating electrical, replacing or shampooing carpets, painting interior walls, repairing damaged floors, updating kitchen, painting outside of home, and updating bathroom’s.

The home improvement projects with the highest price increases to a home’s resale value are updating the kitchen ($1,200 cost / $2,850 price increase), followed by painting the outside of the home ($900 cost / $1,815 price increase) and home staging ($300 cost / $1,780 price increase).

“Inexpensive cosmetic home improvements and basic improvements greatly enhance the value of the home,” stated Carol Wilson of Carpenter Real Estate in Indianapolis, IN, HomeGain AgentEvaluator member since 1999.