Five Ways to Get a Good Deal on a Home

With home prices falling, it's a buyer's market out there. How do you find a great deal on a home in this soft market?

Look for key phrases that will tell you the condition, age and how long a house has been for sale before purchasing. You might bargain your way to a more-affordable home.

(ABC News/Getty)

Glenn Kelman, president and CEO of the online real estate brokerage company Redfin, crunched the numbers to figure out which sellers are more likely to negotiate. Here are Kelman's tips on how what to look for when searching for a housing bargain:

Tip #1: Look for "price-reduced" signs.

If the price drops once, it's likely to drop again. Keep an eye out for a pattern of dropping prices. Once there is blood in the water, sharks can keep feeding. That being said, you can't ask a seller who has just lowered his or her price by $20,000 yesterday to drop it again today. But if they drop the price once, they're predisposed to drop it again.

Tip #2. Look for "fixer-uppers."

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In the real estate market right now there's a heaven and there's a very large hell. Heaven is that small part of the market that sells very quickly. If you own a fixer-upper, you're in real estate hell because those houses just aren't selling right now. Buyers are scared of anything that doesn't look good. People who are selling fixer-uppers are more concerned about unloading the property than trying to make a big profit. But people who have invested a lot of money in remodeling have an emotional connection to the place and they are a lot less willing to negotiate. Key phrases you should search for are: "fixer-upper," "potential," "value in land," "investment property," "tender loving care," "contractor's special" and "as-is."

Tip #3. Look for homes owned for 10 or more years.

Someone who bought their place 20 years ago for $200,000 and is now selling for $900,000 is going to make $700,000, so it doesn't make much of a difference for them if they accept a bid $10,000 or $20,000 below their asking price. People who have a lot of equity have more room to negotiate than someone who's barely breaking even.