If you're in the market for a new home, now is a very good time to buy one. AOL's Top 5ive Mistakes Home Buyers Makes offers this bit of good news: home prices are falling, which allows buyers more negotiating power. But, AOL also says that lining up financing has become much more difficult as droves of homeowners default on their existing mortgages. This does not mean, however, that you won't be able to purchase your dream home, but if you're buying now, it's to your advantage to be cautious and conservative with your purchase.

AOL's Top 5ive offers these five mistakes to avoid when looking for a home in today's real estate market:

1. Waiting to Sell Your Home

Given the current housing environment, it's vital that you sell your existing home before you commit to a new one. Because there are so many homes on the market right now and lending standards for potential buyers have been tightened, it may take longer to find a buyer than it would have in past years. If you choose not to start showing your home until after you've found a new home and signed a contract, you are risking having to pay two mortgages until your old home sells.

Also, the only accurate way to know the real market value of your home (and how much you can afford to spend on a new home) is to see how much someone else is willing to pay for it. Peter Comitini, a real estate broker with the Corcoran Group, says, "if for some reason you've overpriced the property you already own, you'll know that after the first two or three weeks it's on the market." Once you have a realistic idea of the amount your home will sell for, you can adjust your budget accordingly, says Comitini.

2. Ignoring Your Credit Score

As soon as you decide to move, you should get a copy of your credit report. Nearly 80 percent of credit reports contain some kind of error and 25% of these are serious enough to lower your credit score substantially, which could disqualify you for the most competitive interest rates. Someone with a credit score of 620 would pay at least one interest point higher than a borrower with a score of 720, or maybe not qualify for a loan at all, says Geoffrey Sheerar, a mortgage broker with New York City-based mortgage brokerage firm Apple Mortgage.

Reviewing your credit also allows you to settle any delinquent accounts. Sheerar says "I've seen a client get a worse credit score than he should have over a $40 doctor bill that went to collection that the person didn't even know about." Once you find a problem, however, it can take several weeks and some personal effort to fix.

3. Skipping the Mortgage Preapproval Process

In the current market, it's very important to shop around for a mortgage and get preapproved by a lender before you even start visiting open houses. While borrowers (including those with low credit scores) had seemingly limitless options a few years ago, times have changed. There are now fewer lenders, many who have stopped underwriting riskier loans in favor of more traditional fixed-rate mortgages.

Pouring over newspapers for prevailing rates probably will not be helpful since lenders will adjust your rate based on how risky they feel you are. By getting preapproved, you will have a better sense of what your interest rate will be and also know about the type of financing that's available to you. At the moment, someone with excellent credit could qualify for a 6% interest rate on a $400,000 loan and another buyer with closer to average credit could be charged more than half a percentage point higher, says Keith Gumbinger, vice president with HSH Associates Financial Publishers, a Pompton Plains, N.J.-based mortgage research firm.

Rates are certain to fluctuate as you search for your new home, so you should check with your bank regularly. Given the uncertain economic environment, a bank may preapprove a mortgage one month, then reject it the next. Once you have a good estimate of your financing options, you can use a mortgage calculator to see how much you can afford to spend.

4. Not Budging on Your Budget

Buyers today have more negotiating power than ever, given the current economic circumstances. Don't be afraid to make an offer that's far from the asking price. Once you find a home that you really love and you're negotiating on price, it would be foolish to walk away from the property over just a few thousand dollars, says Brown Harris Stevens' Clayman. An extra $10,000 on a loan valued less than $417,000 will cost just $60 more each month.

5. Signing a Contract With Contingencies

Unfortunately, it isn't enough to secure financing and find a place to call home. You need to find a seller who is ready to move quickly and who won't include numerous onerous contingencies in the contract that would allow them to stay in their house for an extended period of time. Corcoran's Comitini warns buyers to avoid sales that are dependent on the seller finding a new home first. The risk here is that you wait around for months only to watch the interest rate lock on your mortgage expire, thus forcing you to spend more money than you had planned on the same exact home. Or, the deal could fall apart entirely, putting you back where you started.