Q: I am a first-time buyer trying to buy a condo, but every time I put in an offer, someone else gets it instead. In some cases, I was muscled out by people who could pay cash. I can’t afford to do that. Is there any other way I can win one of these bidding wars?

A: Although it remains a buyers market in most parts of the country, you’re looking for a place where there’s scant inventory: According to a recent search on Loma Linda (Calif.) Real Estate, only seven multifamily homes were for sale within the town borders. With such short supply, it’s not surprising that prices have skyrocketed: DataQuick reports that in March, the median price for a condo was $176,000, up 120% from a year earlier.

Still, there are ways to get ahead of the competition. Here are some tips:

1. Be first: I presume you’re working with a buyers agent; if you’re not, you should be. Make sure that the agent knows that you want to jump on any appropriate property as soon as it becomes available. Also, put a tight deadline on your offer so the listing agent can’t use it to solicit other offers from interested buyers.

In a blistering-hot market, I once made an offer on a condo, sight unseen, on the day it was put on the multiple listing service. I made it clear that because I didn’t want to get into any bidding wars, the offer would be withdrawn in exactly one hour. My offer was accepted – including the clause that gave me the right to back out of the deal if I didn’t like the unit after I saw it.

2. Be pre-qualified: Although you can’t pay all cash, if you have a letter from a lender saying you’ll qualify for the necessary loan, you’ll be in a stronger position. Because lending standards have toughened, be prepared to make at least a 20% down payment. To prove you’re serious about buying, offer the seller a substantial earnest-money deposit as well — up to 3% of the purchase price.

3. Be the higest: Obviously, sellers want to get the highest price possible for their property, so a generous offer will trump an all-cash one. But ask your agent to do a comparative market analysis first so you don’t pay more than the market price. If you do, your deal will fall through – or you’ll be asked to put up more cash – once the lender has the condo appraised.

4. Be easygoing: A survey last year by the California Association of Realtors found that three-quarters of all sellers are putting their property on the market because of financial difficulties. So although I would never suggest that you waive an inspection contingency, don’t demand any monetary concessions, like a decorator’s allowance, or help with closing costs. Similarly, ask your agent to find out if some accommodation on time would suit the seller’s needs – perhaps a quick closing date for a seller who’s having trouble paying the mortgage or, conversely, a long rent-back after closing for sellers who need time to find another place to stay.

Source: www.msn.com and The Wall Street Journal