When it comes to building a home, Paul Esajian, star of A&E's "Flip This House," finds that knowledge is the best tool that a homebuyer can store in a tool chest.

Without it, they're at the mercy of the builder.

"Consumers have to do their part and became educated on the process if they want to negotiate more effective," Esajian, who also own CT Homes in New Haven, Ct.

Now may be the perfect time to negotiate with homebuilders and contractors. The market slowdown has created greater availability and flexibility among subcontractors and laborers. And the drop in prices of oil - the basis of several building products - brings down cost in materials.

"In reality it's a perfect time to build and get a very reasonable price," says Jerry Rouleau, founder of the real-estate consulting firm J. Rouleau & Associates in Terryville, Ct.

The National Association of Home Builders reported in April that - based on U.S. Census Bureau data comparing home prices, mortgage rates and minimum income required to purchase a median-priced home in February 2007 and February 2009 - today's typical family can buy a house with $20,000 less in household income and save nearly $500 per month on their principal, interest, taxes and insurance.

So, if you're toying with the idea of building that dream home or buying into a new development, take the lead and determine exactly what you want and what you can afford.

Real-estate agent turned consumer advocate Fatima Mehdikarimi, of Atlanta, says it's a good idea to check out model homes but don't fall in love with them.

"Model homes have a lot of extras that will bring up the cost of the house. You need to focus on what really important to your family," she says.

The same goes for if you're building a custom home. Make a list of must-have items and another list of would-like features. Be willing to scratch off the would-like to afford what's truly important.

"Arm yourself with as much information as possible and be incredibly specific with your requests. For example, many buyers will want to upgrade to a stainless-steel appliance package. But a stainless-steel appliance package can range from $2,500 to more than $10,000," she says.

That's when you look at brands and models. It may be that if you buy the stainless appliance yourself, you can get a better deal. Builder often give you an allowance for appliances, countertops, fixtures and other items, which you can use to buy the exact model that you want.

Scoping out materials in advance also helps determine if what you're being asked to pay for a particular project is reasonable, Esajian says.

"You need to be prepared to do a lot of legwork," he adds. That includes learning about the different phases of home construction.

Esajian says you should be comfortable enough with industry-specific terms to have an intelligent conversation with a builder. Remember that the more you know, the easier it is for you come out ahead.

Once you're more informed about features, prices for material and the process of building a home, you're ready to sit down with some contractors for serious negotiations.

Esajian insists that you're shooting yourself in the foot if you don't get at least three quotes. Each should include the same features that you want in your home. Do your due diligence and get references. Don't forget to visit a few homes to determine the quality of the craftsmanship.

Experts also recommend getting pre-approved for a loan to give a builder confidence that the project can be carried out.

Once you're face to face with a builder, here are some negotiation tips that pay help you reach your goal:

• Be cognizant of how high you can really go for some of those extras that you may want.

• Ask for an estimate on the project without telling them your budget.

• Pause when you get the initial contract. Present a counter-offer.

• Anticipate objections or problems. Figure out a game plan.

• Know when it's time to walk away or sign a deal.

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