Question: Is it possible to buy a home below market price?

Answer: Certainly, but do not hold your breath. It takes a lot of determination and time to find a real bargain. But if you are adamant, here are some likely targets to pursue:

• foreclosed property
• a fixer-upper
• hard-to-sell new homes in a housing development
• tenant-in-common partnerships

With the latter, you may be able to buy a partial interest in this form of title to property owned by two or more individuals because the partners often sell at a discount. However, bargains are easier to come by in a soft real estate market, when the economy is in a recession, and when homeowners, and builders and sponsors of condominium conversions, are desperate to move unsold units.

Question: Are low-ball offers a good idea?

Answer: Any offer can be presented, but a low-ball one that is extremely less than the asking price can dampen a prospective sale and prevent the seller from negotiating at all. Unless the home is overpriced to begin with the offer will probably be rejected.

Do your homework before making an offer. Compare prices of recently sold homes and new listings in the neighborhood. It also helps to know something about the seller’s motivation. A lower price with a speedy closing, for example, might motivate a seller who must move, has another house under contract, or must sell quickly for other reasons.

Also recognize that while your low offer in a normal market might be rejected at once, it might motivate the seller in a buyer’s market to either accept it or make a counter-offer.

Question: Can you negotiate interest rates?

Answer: A few lenders will negotiate the mortgage rate and number of points on a loan. However, this is more the exception than the rule with established lenders. As always, shop around and know the market before you enter a lender’s office. Rates are often published in local newspapers and on Internet Web sites. You may have more luck when dealing directly with a seller who has agreed to finance your loan. He is likely to be more open to negotiation, particularly when motivated to make a quick sale.

Home Buying Tips

One of the most frequently asked questions about buying a home is related to negotiating a fair price. Buyers -- especially first-time home buyers -- want home buying tips, particularly about negotiating.

While some people feel uncomfortable bargaining even at a garage sale or farmer's market, in real estate, negotiating is part of the home buying process.

Here are proven tips for becoming a successful negotiator when it comes to buying a home:

Home Buying Tip #1: Know your seller's motivation. A seller who needs to move quickly because of a job transfer, divorce, or contract on another home is more likely to accept a lower price. In this case, the seller is motivated by closing the sale quickly.

Home Buying Tip #2: The "listing" or "asking" price is what the seller ideally would like to receive. However, it's not necessarily what he or she will settle for.

Home Buying Tip #3: Before you make an offer, know the market value of the home. Your agent can help you determine this by checking recent sales and listing prices of comparable homes in the neighborhood where you're looking.

Home Buying Tip #4: Be flexible. Never say, "Take it or leave it." An attitude like this can ruin the potential for making a deal.

Home Buying Tip #5: Each time you increase your offer price, ask for something in return such as repairs, appliances, even lawn furniture or the riding lawn mower.

Home Buying Tip #6: Take a tip from poker players and never show your hand -- or reveal your next step.

Home Buying Tip #7: If you plan to pay cash or have a tentative commitment for a mortgage loan, use your strong financial position as a bargaining tool.

Home Buying Tip #8: Don't let your emotions (or those of your spouse) get in the way of negotiating the best deal. Leave your pride, fear, anger, and emotional attachments at home.

Question: What contingencies should appear in the offer?

Answer: When you look to purchase a home, anticipate potential problems. But protect against them so that if something does go wrong, you can cancel the contract without penalty. This is what contingencies allow you to do. They should be included in any offer you present to buy a home.

Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on your ability to obtain a loan commitment from a lender, and an inspection contingency, which allows you to have a professional inspect the property.

Without contingencies, a buyer could forfeit his deposit under certain circumstances if he backs out of a deal.

The purchase contract also should include the seller's responsibilities, such as passing clear title, maintaining the property in its present condition until closing, and making any agreed-upon repairs.

Question: Does the seller take the furnishings once the home is sold?

Answer: Normally. This is because the fixtures; personal property that is permanently attached to a home, such as built-in bookcases or a furnace automatically stay with the house unless noted otherwise in the sales contract. Anything that is not nailed down is negotiable, including appliances that are not built in, such as washers and dryers.

Question: Do I need an attorney to buy a home?

Answer: A lot depends on the state where the property is located. Some require an attorney; others do not.

Most homebuyers can generally handle routine real estate purchase contracts as long as they read the fine print and understand all the terms. But pay close attention to any clauses, contingencies, and other special considerations that will allow you or the seller to back out of the contract. When in doubt, consult an attorney. Ask relatives and friends, or your real estate agent, for recommendations. Call to inquire about their fees and to check their level of experience. Expect that more seasoned attorneys will cost more.