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Q. Is there really any good, low-risk way to buy a new house (for living in, not for an investment) that is significantly below market value? We live in a suburb of Minneapolis, and because we work out of our home office and don't have to commute to the city every day, we wanted to find a bigger house out in the country or near a small town (some place about an hour's drive from the city), where hopefully we'd get more for our money. And because we're flexible on where we can move to, we were hoping that would translate into us having a better chance at finding a "deal" of a house some where. Problem is, the houses we've been finding through MLS and FSBO listings haven't been that great of a deal. But we're sticklers for a great deal, and are willing to do some extra work on our end to find and buy a house at below market value ... if that's possible. I doubt you can get a good deal through a realtor and MLS because you're competing with too many buyers. The FSBO homes we've found seem to be overpriced (you'd think the FSBO sellers would price their homes at a discount compared to a realtor-listed home to reflect their savings on realty commissions and to give buyers an incentive to buy to make up for the inconvenience and added cost -- i.e., having to hire a real estate attorney -- a buyer incurs when buying a home that is FSBO ... but most do not do this). So are there any good alternative ways to find and buy a house at below market value? From what little I know, sounds like buying homes at foreclosure auctions is too risky, plus you need to buy in cash ... which we couldn't do. Are there any ways (no scams, please!) to buy houses from a bank -- at a discount -- before foreclosed houses get to the auction stage? Are there any ways to find and make offers to potential sellers before they try to sell their homes through a realtor? Are there any ways to capitalize on being flexible on where we live, and translating that into large savings on a house? Basically, I'm wondering if any of your real-estate experts have any tried-and-true techniques for finding a house at below market value. I tried to find books on this subject, but couldn't find any legitimate ones. Any advice would be appreciated!!!

A. In my experience, the farther you get from "civilization", the more flexibility you will have in price. I would suggest you find an area you like and start making "low-ball" offers. It is not atypical to have very long time on the market for places that are out in the boonies. If your seller is at all motivated to move the property, they will start to consider lower offers more seriously as time progresses. I have found that realtors will often discourage you from making low-ball offers but buyers will often consider them and most selling realtors are professional enough to present any actual offer received to their sellers... I think they have to but it seems like they frequently act like they won't just to get you to offer more. Just to give an example, we were looking at a house in the "boonies" in Hawaii... had a low-ball offer (30% below asking price) on the table on September 10th 2001. We received a counter from the sellers that "split-the-difference" on September 11th. With the dramatic change in world situation and financial condition, we decided that we would hold off on that particular geography and let the conversation die off without further negotiation. Just lately (within the past couple of months), we decided to start considering it again. I did a search online (realtor.com) and found the exact same house on the market (still or again... I don't know yet) but the asking price is now about 5% over what we originally offered. I think this is a pretty unusual set of circumstances but illustrates the point I am trying to make... I think. Now mind you, this Hawaii property is not in a high tourist area and not particularly attractive unless you happen to need to be in that area for some other reason... that is why it was hit so hard I think. I am not a real-estate professional but have bought and sold a few places in my time... so these are just my own personal observations and experience. I would love to hear from true real estate professionals on this topic.

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