Real estate in 2006 turned a corner - and not a good one. In the past year, home prices have dropped 2.2%. In this kind of a market, once you've found the house you want, start the bidding at least 15% below the asking price. Barry Miller, a broker and owner of Denver-based Buyers Only America Realty, says that's the average discount his clients are getting.

Paying a buyer's agent an agreed-upon fee, if you can in your area, makes sense as well. Having a negotiator who is working for you will probably lead to a lower price.


Buy from a builder. Many homeowners will wait out the bust. Builders can't afford to. Besides a lower price, many are offering thousands in upgrades. Skip the stuff and ask the builder to buy down your mortgage rate. That's worth more than any perk in the long run.

Get a second opinion. If you are still not sure you got the best deal, spend $350 to hire your own appraiser. Often the appraiser brought in by the lender is motivated to inflate the price so the bank can make the largest loan possible. If your appraisal comes in at less than the agreed price, renegotiate. And if the seller won't budge, walk. You can find another house.
- Stephen Gandel, Money Magazine senior writer