As real estate markets continue to decline around the country, many homeowners are wondering what they can do to protect themselves and the investment they have made in their home. There are actually many different steps you can take to make sure you stay ahead of the softening real estate market.

One of the first steps that should be taken is to check with either your city or county property tax office to research your current tax assessment. This will tell you what the county or city states your home is actually worth. You should then compare this rate to what your home is currently worth based on current market conditions. It is not uncommon for homeowners in several states, such as in California, to discover that they are paying more money in property taxes than they should be based on the value of their home in the current market.

In some states, homeowners are actually paying up to 40% more than they should be. If you are not sure of your home’s current value in the existing market, it is also a good idea to have your home appraised to determine its current value. Taking both of these steps will give you a realistic idea of the value of your home in the current market and ensure that you are not paying more money in taxes than you should be.

If you do have an adjustable rate mortgage it is certainly worth it to consider refinancing your mortgage to a fixed rate mortgage. Before you actually refinance; however, there are several steps which you should take first. Begin by inspecting your existing mortgage documents to determine whether you will be penalized for paying off the existing loan early. While you will be taking on a new loan, your existing loan will be paid off when you refinance it and this could subject you to penalties is such a clause exists in your mortgage documents.

In some cases, you may discover that you actually owe more on your home than it is worth. This is actually quite common now among homeowners who took out exotic mortgage loans a few years ago when prices were rising rapidly and the market was red hot. Today; however, this can cause quite a bit of dismay among homeowners who are facing large mortgage payments on homes that have dropped rapidly in value. While it is anticipated that the market will begin to stabilize sometime next year, you will need to give some careful thought to whether it would be in your best financial interest to simply walk away from such a situation and try to start fresh.

Additionally, you need to consider how long you plan to remain in the home and balance out that time in comparison to the amount of closing costs you will need to pay when you refinance your home. While a number of mortgage companies advertise ‘no cost’ refinance loans you should be aware that such loans rarely, if ever, exist. The costs for refinancing your loan are typically financed in with the loan under this type of arrangement. This means that instead of paying the costs for the loan up front you will be paying interest on them throughout the duration of the loan. In addition, it is important to research any mortgage company you consider to ensure there have been no complaints filed against them before you refinance your mortgage.

If you plan to remain in your home, it is also a good idea to check your homeowner’s insurance policy to be certain that it is up to date. This can prove to be critical in the event you suffer any type of loss on your home in the future. If you live in an area that is susceptible to hurricane or storm damage it is especially important to make sure that your policy accurately reflects your home in its current state.

During the last few years before the market started to turn downward, it was virtually a guarantee that you would be able to sell your home if you put it on the market. In fact, there were many markets that were a virtual hot bed of activity, with bidding wars inciting prices well above the asking price. The low interest rates at the time were all the encouragement buyers needed to start snatching properties at a historic rate. As a result, numerous investors were able to double the investment they had made in short period of time.

As many predicted would happen; however, the real estate bubble did indeed burst and many are predicting that the market of 2008 will make the preceding two years seem like a cakewalk. Once hot markets have declined rather rapidly, leaving investors and homeowners alike wondering what they can do to sell their properties as loan underwriting guidelines tighten and the market floods with inventory.

If you find that you absolutely cannot wait until the market turns around to sell your property and must sell it now, your best hope may be creative marketing tactics.

The first thing that must be understood about the current market is the fact that the market is rife with choices. A few years ago buyers felt a decided pressure to move and move quickly when searching for a property. Choices were few and the best properties were likely to be snatched up as soon as they hit the market. Today that is not the case. There are far many more properties on the market, prices are lower and buyers know they have the advantage of being able to take their time looking. This means if you are going to be competitive in selling your property, you will need come up with something that will set your property apart and entice buyers.

In the last few years before the market crashed, sellers had no need to use seller concessions. In areas where the inventory is high; however, seller concessions are becoming far more common. Basically, a seller concession is anything that a property owner uses to curry favor with buyers. The range of possible seller concessions varies quite a bit. For example, you might provide a decorating allowance if your carpet is outdated or even provide a contribution toward closing costs in order to encourage first-time home buyers to consider your property.

In the past these types of concessions were not usually offered until buyers and sellers were in the process of negotiating. In most cases, such concessions would not even be offered until something turned up in the inspection. That does not mean that they cannot be offered during marketing; however, in order to attract prospective buyers.

The key is to recognize that the balance of power has definitely shifted. Buyers hold the upper hand right now and sellers must be prepared to do what they can to attract them. If you have already taken certain steps to move your property such as pricing it aggressively then you may wish to consider making some concessions to increase the interest of buyers.

One option would be to pay points for the buyer. This is actually a situation that provides a win for both buyers and sellers. Let us say you have a property listed at $150,000. If you slashed the price 3% then you would be taking $4,500 off the price. You could use that same amount of money; however, to purchase mortgage points for the buyers. In fact, you might even find that you can purchase a substantial amount of points for a bit less money. This strategy would allow buyers to obtain a much lower interest rate and as a result a far lower monthly payment. This would make your home more affordable than similar homes in the neighborhood and may just provide the incentive buyers need to snatch up your home.