I think you definitely can, as long as you are patient and wait for the right place. Also, you may find some large 3 BR's that could allow for a 4th BR to be added. And you are right that there is often room for negotiation in this market, sometimes much more than you would expect. Forexample, we bought a duplex last year that was originally listed at $1.2 for $925K.
But Danielle is right, you need to have your act together so that you can move quickly when the opportunity arises. That means you have a solid pre-approval from a respected lender, and the ability to close quickly if that helps make the deal.
Most important though is having the right representation. Many buyers don't give a lot of thought to who their representative is because the seller pays the commission - big mistake. An experienced and skillful negotiator who knows the business can not only help you save a lot on the purchase price, but also avoid homes with issues. They also understand that getting an offer accepted means positioning as well as price.
If you need help, interview a few agencies and see which one makes the most sense, and don't be afraid to ask the tough questions.
Lance King/Managing Broker