To Score A Home Sale In This Market, Step Up To The Plate

Develop A Competitive Edge

BY KATHLEEN DOLER FOR INVESTOR'S BUSINESS DAILY

Price with carrying costs in mind, now that it's taking months to move a property

The residential real estate market's showing a cruel twist to the maxim that time is money.
Real estate agents warn that now a seller may have to pay more directly or indirectly to get a property sold in a timely fashion. So many homes are for sale that finding a buyer amid the competition can take extra effort and strategy.
U.S. median home prices have been falling and the inventory of existing unsold residences rising. About 4.6 million homes are available. That's nearly a third more than a year ago and it would take 9.6 months at the current sales pace to sell them all, the National Association of Realtors says.
Homes stay stuck on the market longer. While last year a NAR consumer survey put the average at six weeks, homes now tend to remain unsold at least a couple months.
"Based on the historic relationship between this (annual) survey and our monthly read on supply, the current national time on market is in the range of eight to 10 weeks," said Walter Molony, a spokesman for the group.
Those figures may underestimate how tough it is to sell now as they don't include sellers who've given up, says Brock Harris, owner of Brock Real Estate in Los Angeles.
"Sellers are pulling their homes off the market," he said.
What's a seller to do? One recommendation from housing industry specialists is to get the most experienced Realtor available, someone who's been in the business more than five or even 10 years and has sold before in a down market.
How do you find the right real estate agent? Some online sites such as HomeGain .com offer referrals and agent comparisons, but wordof-mouth referrals are a tried-andtrue approach. An alternative is to look for the most active Realtors in your area. Who has had the listings that you've seen sell?
Once you've got some names, interview at least three agents and ask tough questions about how they're going to get your house sold.
"It really is a job," Harris said. "And you want someone who will be straight with you — absolute candor."
Price For Now, Not Yesterday
The agent needs to be able to advise you on how to price your property and say what upgrades are needed to make it marketable in the slow sales environment, he says.
"We're seeing a lot more overpriced listings than we ever have," Harris said.
He thinks sellers and agents are putting too much emphasis on dated comparables. A home that sold a month ago isn't necessarily a good comparable for pricing a listing now, he says, because that home was probably put on the market five or six months ago.
"Sellers need to be very, very realistic," Harris said. "They have to under-price their home. Buyers have so much choice they're only going to look at the cheap ones."
It's a particularly poor time for premium pricing and real estate agent commission discounts, according to specialists, who say sellers should expect to pay for expertise, experience and aggressive marketing.
"Real estate is a competitive, cutthroat business, and Realtors are always hungry," Harris said. "If anything, now's the time to pay an extra commission, especially to buyers' agents. We're seeing like 4% to the buyer's agent. In this market, it takes two good agents to pull a deal through."
Getting through a deal usually involves financing. So you want a real estate agent who's knowledgeable about home financing and who has very good contacts with mortgage brokers. Sure, the buyer's agent will probably steer a potential buyer toward a mortgage broker, but more names can't hurt.
Survive Tighter Financing
Buyers may have a tougher time getting a good mortgage, given the recent tightening of credit standards. So sellers may consider financing part of the deal themselves, a tactic used to close deals in other real estate downturns.
"You'll want a Realtor who has the experience to help you through this," said Bradley Inman, founder of Emeryville, Calif.-based Inman News, which runs a real estate investing Web site (inman .com).
Getting an offer, and thus to the financing step, requires "PEA — price, maximum exposure through advertising and accessibility," said broker George Stephens, at ERA Stephens Properties in Houston.
Make your property shine for its showing, and take care of repairs so it compares well, Stephens says. He recommends having some properties pre-inspected, before an escrow, so a seller can identify and fix problems that might quash a sale.
Spur The Sale
Be diligent about using traditional sales tactics, too.
Make sure the Multiple Listing Service (MLS) entry that describes your home to Realtors and househunters is detailed and includes great photos. Ask your agent to ensure that the property gets as much exposure on Web sites — the broker's, your Realtor's and other spots — as possible.
A great flyer is a must. The flyer box needs to be stocked regularly.
Invite neighbors to view the property — maybe they have friends interested in moving to the area. Your agent should hold a broker's open house as well as several buyer open houses.
Beyond open houses, Stephens says sellers need to make their properties accessible for showing "seven days a week between 9 a.m. and 7 p.m."
He cautions sellers that if they limit one or more of the PEA factors, they're placing barriers to their objective of achieving a timely sale under current market conditions.

Open house signs fill a corner in Altadena, Calif., on Sunday, Aug. 26, 2007. Sales of existing homes have dropped to the slowest pace in nearly five years and are 9% below a year ago. Amid that, the median home price has slipped. AP