The market is flooded with inventory.

According to the U.S. Department of Housing and Urban Development Office, the inventory of existing homes available for sale at the end of the fourth quarter of 2006 (the latest figures available) was more than 3.5 million, an increase of just over 23 percent from the fourth quarter of 2005. While this may not be good news for the overall housing market, it is great news for homebuyers.

Two years ago, homebuyers might have settled for a home without the fireplace or swimming pool they wanted because there weren’t any available in their desired location. Now, with so much inventory out there, you are more likely to find the features that are valuable to you in the community you want to live in.

A year ago, it wasn’t unusual for homebuyers to bid over asking price in order to get the home they wanted. But in today’s market, consumers have more power and they’re flexing it.

“I had a buyer who was interested in a home that had been on the market for five or six months. The seller paid the buyer a year of property taxes plus closing costs just to get it off his hands,” says Nicole Ramseur of Weichert Realtors in Basking Ridge, N.J. “There are lots of ways to negotiate,” Ramseur says. “If the home has older appliances, I might ask the seller to purchase a warranty plan. Or if a buyer wants hardwood floors in a carpeted home, we might subtract the cost of wood flooring from the offer price.” Some sellers may be willing to negotiate with homebuyers. Work with your Realtor to get the most out of your purchase.