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Price your home correctly in a dollar-conscious market

January 31, 2009

In a tough economy, conspicuous consumption is out and deal-hunting is in. Whether they're buying a Toyota Corolla or a Lexus, consumers are demanding rock-bottom prices. This is especially true in real estate.

"Despite the recession, many people are willing to buy houses now. But they want a lot more value for their money than before," says Dorcas Helfant, a real estate broker and former president of the National Association of Realtors (www.realtor.org).

At a time when "For Sale" signs abound in many neighborhoods, those who are serious about selling must resist the urge to quibble over small money matters, Helfant says, and remember that they will probably get a good deal on the next house they buy.

Given that well-qualified buyers remain scarce in many areas, you and your listing agent will want to tread lightly in all your dealings with prospects.

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Here are several suggestions for home sellers:

· Avoid pricing on an "I need" basis.

Suppose your company is insisting you transfer to an out-of-state location or forfeit your job. And also suppose real estate is more costly in the new area. In such a case, you could be tempted to price your home based on how much cash you need to make the transition.

But as many sellers have learned the hard way, home shoppers don't care about your financial needs. And in this market, the odds are they won't even visit a property they consider overpriced, says Tyson.

Before pricing, he says you and your agent should carefully review the most current information available on comparable sales in your community. Also, do a "drive-by" tour of these recently sold properties to gain a grasp of the current market.

During a recession, it's especially important that the price tag you attach to your home be no higher than its current market value. Even then, you should realize that buyers will probably expect a discount of up to 5 percent off that list price, according to Tyson.

· Treat all bidders with respect.

Just a few years ago, during the heady days of the last sellers' market, many sellers received multiple bids and could afford to take their time responding to offers. But given that offers are now much scarcer in many areas, sellers who don't reply to a bid within 24 hours risk withdrawal of that offer.

For that reason, Tyson recommends you do some soul searching before advancing a counteroffer to a bid that you and your agent think is in the right ballpark, because it could end all negotiations and leave you in the cold.

There are exceptions to the make-no-counteroffers-in-this-market rule. Specifically, you and your agent won't want to passively accept the first volley from a "bottom fisher" trying to acquire your place at a drastic discount off its true market value.

· Try to accommodate the timing preferences of would-be purchasers.

Time is definitely equivalent to money when it comes to the needs of many prospective home buyers. While some buyers want a delayed closing date because they're not yet ready to make a move, more often, would-be purchasers want to move very promptly.

Either way, you could enhance your prospects for selling your home if you accommodate your buyers' timing needs, Tyson says, even if it is inconvenient for you and your family.

You're unlikely to have any face-to-face conversations with those interested in buying your home. Still, your listing agent can mention your flexibility on timing in your Multiple Listing Service entry. Also, your listing agent can convey this directly to potential bidders through conversations with their agent.

· Handle your buyers' inspection report with caution.

Nowadays, nearly all purchasers hire a home inspector to check out a property before they make a final commitment to its purchase. And many contract offers are written to allow the buyers to opt out of a deal if they don't like any element of the inspector's findings.

Perhaps your buyers' home inspector believes your property needs items you don't consider truly necessary, like a new shower head in the master bathroom or a replacement disposal in the kitchen. In this case, Helfant says it's probably wise to go along and pay for the changes without a protest, because the cost of the work is relatively modest.

But if the inspector is recommending expensive projects you consider unwarranted, like the replacement of a functional air conditioning system or a roof that's still fully watertight, Helfant says your listing agent should tactfully request a second opinion from another inspection company hired by you.

· Don't bicker over small "leave-behinds."

Every real estate agent can recall at least one home sale that fell through because the sellers stubbornly insisted on keeping a few low-value items that the buyers spotted when they first visited the place. Looking back, most sellers regret taking this stance, Helfant says.

Copyright 2009 Ellen James Martin

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