If you find the right house at the right price, buy it

If you're serious about buying a house, this is both the first step and the final goal. To put it more precisely, you have to decide whether you will actively shop and then negotiate a fair deal, or if you'll just passively browse houses, hoping to stumble on a steal.

You're more likely to succeed with the active approach instead of waiting (possibly in vain) for prices to fall further. You can't predict when the local market will hit bottom. Even if prices do fall, someone could buy your favorite house out from under you. Diane Saatchi, a real estate agent with the Corcoran Group on Long Island, N.Y., draws this analogy: "It's like when you find a dress that you like, and you wait for it to be on sale, and then the sale comes and they don't have your size. Theoretically, you saved 20 percent. But you don't have your dress."

There's always the possibility that you'll buy a house and then the value will fall. In the 1990s, Southern California and South Florida had housing slumps in which it took years for prices to recover their previous levels. It could happen again, there or elsewhere. For that reason, "buy a home that can grow with you if necessary," says Elizabeth Razzi, author of "The Fearless Home Buyer."