Tips for Home Sellers In a Cooling Market

This spring, luring buyers may require some extra work. Homeowners will have to employ more than the usual selling tactics of creating 'curb appeal' and presenting a clean and presentable interior to garner a sale.
By: Kelly K. Spors: The Wall Street Journal Online
Home sellers this spring may need to work extra hard to lure potential buyers.

The inventory of unsold homes on the market rose to an eight-year high in December, according to the National Association of Realtors. "We're definitely not in the market we were in a year ago," says John Wenner, an agent with Re/Max Achievers in Scottsdale, Ariz., adding that it now takes several weeks, no longer days, for most homes in his area to sell.

Time-tested advice still rings true: Sellers should focus on giving their home "curb appeal." The yard should be well-groomed and the grass green, and the exterior of the house should look attractive and well-maintained. Likewise, the interior should be immaculate. "The first impression is very important in this kind of market because buyers have so many choices," Mr. Wenner says.

The Right Price

The next, and often most challenging, step in a cooling market is appropriately pricing a home, says J. Lennox Scott, chief executive of John L. Scott, a real-estate firm in Bellevue, Wash. Sellers no longer can assume the home will sell for slightly more than the last comparable sale in the neighborhood. It might even sell for less.

A competent real-estate agent should be able to gauge the market, but sellers also can do some research. Mr. Scott suggests looking at recent comparable sales in the neighborhood, and determining what percentage of those homes sold in the first 30 days on the market. If less than 20% sold, you're likely in a softening market. If 20% to 30% sold, you're in an equilibrium market. Over 30%, you're in an appreciating market.

Sellers in a softening market might price their homes at the same or a slightly lower price than the last comparable home in the neighborhood that sold. (Be sure to factor in size, features and other things that could affect the price.)

Time horizon also matters. If you have several months to sell, you might try setting the price a bit higher. But there's a danger to that, says Phyllis York Brookshire, chief operating officer of a brokerage in Raleigh, N.C.: "There's always some backlog of buyers right when you put the home on the market." If you price your home too high, you might miss out on those buyers.

Finding good sales data can be difficult for individual sellers not working with an agent, but it's getting easier. Zillow.com can provide some helpful comparable sales data, though it doesn't include sales in every area.

Getting Noticed

Once a home goes on the market, sellers should make sure the home is widely marketed. Buyers increasingly browse the Internet, so submitting an attractive photo spread of your home's exterior and interior can get more prospective buyers through the door.

Sellers inclined to go without a full-service real-estate agent might want to look for a discount broker that will include their home on the Multiple Listing Service - the listing of homes used by traditional Realtors and posted on many Web sites - for a modest fee. But beware: This is frowned upon by many traditional brokers and it may not improve traffic to your home as much as you think. If you go this route, consider offering a commission to any agent that brings in the ultimate buyer.

Extra Incentives

Some eager sellers sweeten the deal by offering incentives to buyers. These won't make or break the sale, but can give hesitant buyers a little push.

Mr. Wenner in Scottsdale says one of his recent sellers offered a $3,000 credit to cover the buyer's closing costs - a good option since many buyers face a cash crunch when buying a home.

Some sellers also toss in a one-year home warranty, which covers major appliances and some other repairs in the buyer's first year in the home. Home warranties cost $300 to $500, according to American Home Shield, one of the major providers of such warranties.