Not long ago, a prospective home buyer who had no property to sell and who was financially-qualified was in the driver's seat. They had numerous properties from which to choose and most sellers were highly motivated.

No longer. Now when a nice property comes on the market, especially if it is not a short sale or bank-owned, there are frequently multiple offers and it often sells above the asking price.

If you want to purchase a home, you need anticipate that other buyers may be interested in the same property that you are. So how can you compete?

First, you should get your ducks lined up so you can make as clean an offer as possible. If you need to sell your current property so you can make a non-contingent offer, then get you property at least into escrow before you start seriously house shopping.

Unless you are a cash buyer, you will need to get a mortgage to buy your new home. It is essential that you be preapproved for a loan in advance so you can prove to the seller at the time you make an offer that financing will not be a problem.

Then, when you find a property that you really want, you should make the strongest offer that you can. Everyone wants to feel they got a bargain on the house they buy. But, considering that we are still near the bottom of the real estate market, you are probably getting a very good deal even if you pay a little more than the list price.

And if you make your best offer and still don't get it, at least you can take comfort that the buyer paid more than you were willing to pay.

Finally, you need to be patient. You will need to look at everything that matches your criteria as soon as it hits the market. If you like it, get your offer in immediately. You may even have to make offers on multiple properties at the same time.

This feeding frenzy atmosphere may make you feel uncomfortable and therefore hesitant to jump into the market. However, I think what is happening is many buyers and investors recognize that the market has bottomed out and they are trying to make their purchases before prices go up substantially.

Just remember, right now there are more willing, qualified buyers out there than there are good properties. And not everybody is going to get one.

Everyone has their own idea of what they want in a home. You need to buy a place in which you and your family will be comfortable.

On the other hand, you probably won't be in the house or condo forever and, when the time comes to sell, it would be nice to learn you made a sound financial investment.

Here are some thoughts about purchasing a property that will likely appreciate in value over the years.

There are some really unique homes out there. Custom houses or tract houses that have been severely customized can be very dramatic and appealing. Just keep in mind that a home with mass appeal will generally increase in value more that a property that will attract only a few buyers.

If you are buying a detached home, you would be wise to select one with at least three bedrooms. Two bedroom houses have limited appeal unless they are in a senior area. Condos with two bedrooms are much more popular than one-bedroom units.

A detached home will generally appreciate in value faster than a condo. Even though a detached home is more expensive, most buyers appreciate the privacy and lower homeowner dues. The exception is a detached "manufactured home" which will not usually hold its value very well.

Remember the old adage of "Location, Location, Location". A desirable school district (such as Poway Unified) will attract more buyers and thus increase value. Also, being in a quiet, safe area is a fine idea.

Finally, according to the National Association of Home Builders, here are the top kitchen and bathroom features sought by home buyers.

Kitchen: 1) Walk-in pantry; 2) Kitchen island; 3) Built-in microwave; 4) Water filtration system: and 5) Storage area for appliances.

Bathroom: 1) Linen closet; 2) Exhaust fan; 3) Shower separate from a tub; 4) Water temperature controls; and 5) Whirlpool tub.

So, when you buy a home, choose one you love but just remember that you may want to sell it someday.

Floods in a home are more common than you might think. They can result from a leaky roof, broken water pipe, or malfunctioning dishwasher.

If you have a flood, it is imperative that you take immediate action. Just mopping up the water won't hack it.

Left unattended, water can result in mold and possibly ruined cabinetry. Professional flood abatement includes the use of heat and fans to thoroughly dry all areas.

As soon as you notice a flood, contact your homeowner insurance. In most cases your policy should cover the cost of repairs, less any deductible.

Beware that some insurance companies will pressure you to use their restoration contractor. This is a potential conflict of interest - you want to make sure the job is done right and the insurance company wants the issue resolved as cheaply as possible.

Know your rights. The California Fair Claims Settlement and Practices Regulations allow homeowners to hire the contractor of their choice rather than just settle for the once the insurance company pushes.

The bottom line is a flooded home is a serious situation and it is imperative that you take action to resolve the situation and avoid future problems.

I have recently spoken with several people who were not at all familiar with the current laws regarding capital gains taxes when you sell real estate.

So, even though the current laws have been in place for a number of years, I think it is worthwhile to review them.

First, let me emphasize that I am not a tax professional. I'm just telling you how I believe the tax system works from the standpoint of a real estate broker. Before you make any decision regarding buying or selling real estate, I recommend you talk with your tax attorney or CPA.

When you sell a house or condo, if you have lived in your property for two consecutive years out of the past five, you may exclude $250,000 in profit from capital gains as a single person or $500,000 as a married couple.

So, if the property has been your personal residence, you may not owe any capital gains taxes at all.

Many people were familiar with the previous tax laws, where you had to roll your gains into another property of equal or greater value. That no longer applies. You don't even have to purchase another home.

There also used to be a one-time capital gains tax exclusion of up to $125,000 for sellers over the age of 55. This law is also gone but, with the new law, you don't need it.

If you lived in the property for less than two years, you may still be able to exclude a prorated amount of profit from capital gains taxes, depending upon the reason for your move. If you are transferred to a job more than 50 miles away; have to move for health reasons; or have unexpected circumstances such as multiple child births, divorce, or death in the family, check with your tax professional.

If you are selling a property that was not your personal residence, you face a decision. You can sell and pay capital gains taxes (currently the rate is 15%) or you can execute a 1031 tax deferred exchange to roll the profit into another investment property.

If you plan to sell an investment property in the Rancho Bernardo area, I can hook you up with a very good escrow officer who has extensive 1031 exchange experience and can make the transaction go much smoother.

I hope this answers any questions you may have regarding capital gains taxes. If not, please call me at 858-487-2308.

So you want to buy a brand new home. Should you work with an agent or just walk into the builder's sales office and check out the model homes?

Builders are affected by this "buyer's market" just like other homeowners. So they are offering incentives to attract buyers.

One incentive is a commission to real estate agents who bring prospective buyers to the sales office. If an agent accompanies you on your first trip to visit the models, most builders will pay the agent and you can benefit from the agent's professional advice.

So, what can an agent do for you when you purchase new builder construction?

First you need to know that the agent's role will be less than if you bought a resale home. When you buy a resale, your agent will represent you throughout the entire purchase. The services an agent can provide for new construction are limited but still valuable.

A recent survey by J.D. Power and Associates revealed that builders will now give a buyer an average of $16,500 in incentives. These incentives can come as a reduction in the base price of the home or free upgrades. An experienced agent can help you get maximum incentives.

In addition, your agent can offer advice on your purchase such as insisting upon the right to a professional home inspection, a function most builders will insist you don't need.

If your are considering new construction in the Inland North County portion of San Diego, it would be my pleasure to help you and, assuming the builder is cooperating with brokers, my service will be free.

You have probably heard the terms "seller's market" and "buyer's market". But what do they mean?

Real estate values go up and down, depending upon supply and demand. Obviously, the quantity of homes for sale is the supply and ready, willing, and able buyers provide demand.

Simply put, a seller's market is when there are more willing and able buyers who wish to purchase a home than there are homeowners who are willing to sell. This puts the seller in the driver's seat - they can demand higher and higher prices and offer fewer terms. The result when demand exceeds supply is rising home prices.

Now we are in a buyer's market. There are more homes on the market than there are ready, willing, and able home buyers. This means not all homes on the market will sell and owners who really need to sell are motivated. Supply exceeding demand means lower prices.

So, if you were a potential buyer, would you rather purchase a home in a seller's market or a buyer's market? The obvious answer seems to be that buyers would rather purchase in a buyer's market. So why don't they?

A funny contradiction in real estate is that buyers tend to leap into the purchase process in a seller's market and not in a buyer's market. Why? The simple answer is they are motivated by greed or fear.

During a seller's market, greed kicks in. Buyers see home values rising quickly. They think they can buy a house and watch the value go up and up. This is the time buyers should be cautious because the market is nearing the top. But instead they charge into the market to get on the gravy train.

On the other hand, during a buyer's market, buyers see house prices declining. This should be the time they enter the market to take advantage of the large selection of homes, bargain prices, and motivated sellers.

However, they are afraid. If the market continues to decline, the property they buy might drop in value. So they sit on the sidelines until the market has already turned around and prices start rising rapidly in the next seller's market.

Buyers would be wise to buy during a buyer's market. In fact, when enough buyers jump into the market, that increased demand is what initiates the next seller's market.

In Southern California, we have been in the current buyer's market for three and a half years. If you are a prospective home buyer and hope to take advantage of the buyer's market, you should take action soon.

If you are in the market for a home, boy is your timing great!

Right now there are tons of houses to choose from; prices are low; and many sellers are desperate to cut a deal.

But, perhaps even better for the prospective home buyer are the current interest rates.

Lenders are now offering 30-year fixed-rate mortgages at 5.1%. This is the lowest that interest rates have been since the 1960s!

And the Federal Government is trying to push rates even lower - perhaps as low as 4.5% -- in the next few months in an effort to nudge buyers who are on the fence to buy now and stimulate the housing market and the economy.

Some buyers are waiting in hope that house prices will drop further. I believe this is a mistake because the current interest rates will not be available for long.

Which is better for the buyer - a slightly lower purchase price later or extremely low interest rates now? Let's take an example.

Assume you could buy a home now for $500,000 with a mortgage at 5%. Or you could wait a year and maybe the house price would drop 10% (which I doubt) but interest rates would return to 7%, which is pretty much normal.

If you bought now and put down $100,000 (20%), you would have a monthly payment of $2,147.29 based upon a $400,000 loan at 5%.

If you bought in a year, you would have to put $90,000 down (20% of $450,000) but your monthly payments would be $2,395.09, based upon a $360,000 loan at 7%.

So, because of higher interest rates, your payments would be about $3,000 higher per year. Over 30 years, you would pay $91,000 more during the life of the loan.

When you consider that prices may not decline any further but interest rates will almost certainly climb, if I were a buyer, I would buy soon.

If you are in the market to purchase a home, you will discover that many properties on the market these days are "short sales". This means the owners are upside-down. They owe more on the property than they will net if they sell the property.

Whenever an owner who is upside-down accepts a purchase offer, it will always be a contingent acceptance that is conditional upon the approval of the lender(s). This is because the banks must agree to accept less money than is owed to them.

The upside-down seller is often willing to accept any offer. After all, they will get no money out of the short sale. Their objective is to protect their credit to the extent possible.

In reality, the bank is the actual seller as they are the only ones that can make a final decision on a purchase offer.

You would think that a bank would be motivated to get a property sold, even if it means they get less than is owed to them, so they don't have to foreclose and take over the property.

However, most of the people in the "Work Out" department of banks are just bureaucrats who have no real motivation to make a deal happen. In fact, they lean toward driving a hard bargain to show the bank's investors that they are trying to get the most money possible for the bank.

In the event the owner has multiple loans on the property, the lenders who hold the second or third trust deeds may get no money at all from the sale. So you can see why they might balk at approving the sale.

Once a seller accepts a short sale offer, they forward it to the bank. Often, the bank will come back saying the offer must be higher. Or, in some cases, the bank will not even respond to the offer for several months.

Even if a bank agrees to the short sale and provides a letter to document that decision, they will still demand that the listing agent continue to market the property for sale. And, even you are just a few days from close of escrow, the bank may come to you and say they have a higher offer and, if you want the house, you will have to up your price to equal the other offer or else they will refuse to close.

Technically, you could sue a bank that does this for breach of contract but the truth is they have more money than you and they have attorneys on staff to fight lawsuits.

A short sale can be a good deal for the buyer. However, for the reasons above, I always warn my buyer clients that attempting to purchase a short sale property is filled with challenges. It often takes extra time and can be a frustrating experience.

I've heard several predictions that San Diego will have a wet winter this year. If so, lots of homeowners will be faced with leaking roofs.

As the old adage goes, "An ounce of prevention is worth a pound of cure." So, if your roof has not been serviced in recent years, you should consider having a professional roofer take a look to see if there are any obvious problems.

Some roofers do what is called a roof tune-up. They will inspect the roof and replace any cracked, broken, slipped, or missing tiles. Many leaks occur around the vent pipes for the furnace or water heater so they reseal around all vent pipes.

Assuming you have no major roof problems, this process is usually just a few hundred dollars and a roof tune-up often comes with a one-year guarantee against leaks.

If you need a roof tune-up in San Diego but don't know a good roofer, call me at 858-487-2308 and I'll give you some advice.

John Trucillo, former Chief Economist for the National Association of Realtors, is the smartest person I've ever met on the subject of the real estate market.

In the September-October edition of "The Real Estate Professional" magazine, John stated that "Most of the metropolitan areas in the United States have housing markets that have stopped declining and are stabilized, poised for the upside of the cycle."

I believe he is correct, at least as far as San Diego and Rancho Bernardo are concerned. We are at or near the bottom of the market now.

So, how bad has this down cycle been? I have tracked market trends in Rancho Bernardo every month for many years. The average sales price for a detached home in zip code 92128 topped out in mid-2005 at $671,272. In the past six months, the average sales price was $573,521.

This means home values in this area have dropped 14.6% from the peak. It may vary a little from neighborhood to neighborhood but RB has done well compared to other San Diego communities where prices have fallen 30% or more from their 2005 high mark.

And the inventory of homes on the market in Rancho Bernardo is fairly low. For example, in 1995 at the bottom of our previous down market, there were between 90 and 95 detached homes in Seven Oaks on the market at any one time. Today there are just 29 Seven Oaks homes on the market.

The bad news: Many homes now on the market are bank-owned foreclosures that are priced very low. When those homes sell, they will probably drive values down a little further. Of course, this is a golden opportunity for potential home buyers.

I predict that, once the bulk of bank-owned properties are sold, the market will rebound quickly. Hopefully, our RB home values will be on the rise a year from now.