smart moves 2/2

The public relations consultant in her mid-30s lives with two much-loved cocker spaniels on the 14th floor of an apartment tower. Each day she rushes home from work to release the anxious pets for their walk. With all the elevator time it takes, the routine annoys her so much that she's eager to buy a one-story house in the same area.

Recently, she found the perfect place - a sunny yellow bungalow with a big fenced yard. Because her neighborhood is a buyers' market with a huge glut of inventory, she thought it would be easy to negotiate a good deal. So she was stunned when the owners rebuffed her offer at just $20,000 below the list price of $400,000.

This illustrates the surprising reality that even where buyers have the upper hand, a minority of sellers will refuse to bargain, says Tom Early, former president of the National Association of Exclusive Buyer Agents (www.naeba.org).

"No matter the market, some people stubbornly resist reason. You can wrangle brilliantly, but they still won't come down to earth on price," Early says.

Here are several tips for homebuyers:

n Educate yourself on local property values.

Would-be buyers usually focus their energy on getting a discount off the list price. But is the sticker price truly a good measure of a property's value? Not always, says Eric Tyson, co-author of "Homebuying for Dummies."

Rather than relying on the owners to gauge the worth of their home, Tyson says buyers should ask their agent to prepare a "comparative market analysis." To do this, the agent should gather data on transactions that closed recently on homes in the immediate vicinity. Then these should be adjusted - adding value, for instance, if the place you want to buy has a larger garage than the others.

Your study of neighborhood values should yield a good estimate of the true worth of the home you wish to buy, Tyson says. In some cases, sellers - aware they face a sea of competition - are deliberately underpricing their property. Yet others continue to demand too much. Informed buyers can distinguish between the two groups and bid accordingly.

If you're coming in with a low starting offer, Tyson encourages you to attach comparable sales data in support of your offer. This is a much more effective bargaining tactic than complaining that the sellers are charging too much - criticism that could backfire if they take it personally.

n Find out how eager the owners are to sell.

It's easy to assume that everyone who now has a For Sale sign in their front yard is eager to sell right away. But that's not always the case.

"Many people have no choice but to sell their houses because of a divorce or financial issues. Yet others are merely testing the market and won't sell if they don't get an offer that meets their bloated expectations. Remember that 90 percent of bringing that price down depends on the owners' motivation," Early says.

How can you find out what's spurred the sellers to put their place on the market? Often your agent can obtain answers by simply asking the sellers' agent direct questions, according to Early.

One reason some sellers won't budge is that they're on a different timetable than you.

"Because it now takes longer to sell than normally, homeowners are now being counseled to give themselves more lead time. They're caught off guard if they get an offer right after going on the market," Early says.

There are several reasons that owners may not want to sell immediately. Perhaps they want their kids to finish out the school year before embarking on an out-of-state move. Or maybe their custom-built house won't be done for another six months.

How can you get less-than-eager sellers to bargain? As Early says, one strategy is to volunteer a late closing date in exchange for a significant price cut on the property.

n Don't respond too quickly to a counteroffer.

With a few exceptions, most owners want to move promptly - particularly if their property has languished on the market for weeks or if they're soon confronting a huge increase in the payments on their adjustable rate mortgage (ARM). But that doesn't necessarily mean they'll let go of their property without a struggle over price.

"It's not uncommon anymore for negotiations between buyers and sellers to go three, four or even five rounds before agreement is reached. If you really want the house, it's worth pursuing the process - so long as the sellers are bargaining earnestly," Early says.

n Use the power of time to deal with defiant sellers.

As Early notes, many home sellers have their egos tied up with the sale of their property. That can cause them to overplay their hand, even when they have a pressing need to sell. For example, they might make a counterproposal to your first offer with a 24-hour "take it or leave it" provision.

Should you reply to such a challenge on their terms? Not necessarily, says Early. In fact, failing to answer immediately could be a very effective way to bring them down to earth on price. He calls this tactic the "walk away."

Disappearing from negotiations won't cause unmotivated sellers to yield on price. But it could prompt motivated sellers to take a serious second look at your latest offer, especially if their property has sat unsold for a long time and they've gotten no other bids.

n Recognize the signs of intractable sellers.

Early, who's been in the real estate business for more than two decades, says he can tell immediately when his clients fall in love with a home.

"People get those warm, fuzzy feelings about houses for many reasons. Many swoon over wonderful kitchens, two-story great rooms, floor-to-ceiling windows, ornate staircases or sumptuous master suites," Early says.

But what should you do if the owners of a home demand a price you know to be excessive and all attempts to negotiate seem futile? Then Early recommends you let go of the property and begin seeking another immediately.

"Get right back in the saddle. In the current market, the odds are you'll soon find an even better house at a genuine bargain price," Early says.

Ellen James Martin, a former real estate editor and assistant business editor, is senior financial reporter and columnist for The Baltimore Sun.