As the Market Cools, Setting A Fair Price Helps Seal a Sale

The key to selling a house today is -- drumroll, please -- don't be a greedy pig.

Okay, it's not as simple as that. But the first thing that the gurus, the agents and the writers of new books on "how to survive the coming housing crisis" mention is "set a realistic price."

"It's not what the market will bear anymore," said Walter Molony of the National Association of Realtors. "It's a question of what is a fair price."

Sellers in regions that have seen sharp price gains, such as this one, routinely "used to see what the house down the block sold for and stick on another $10,000," Molony said. "But we're transitioning from what has clearly been a seller's market to what is a more balanced market" between sellers and buyers.

"Pricing it right is the key thing," he said.

Thomas Stevens, head of the national industry group and senior vice president of NRT Inc. in Vienna, said prices "have been escalating a little too fast," squeezing more and more people out of the market. Those who set their prices too high, assuming that past rates of appreciation will continue, are seeing their homes "just languishing on the market," he said recently. But he emphasized that prices aren't actually dropping in many areas, they're just not jumping as much as they used to.

Several real estate agents said they think the Washington area market is stronger than is being reported. But they added that the perception now is that prices are too high.

"The psychology of the buyers I'm seeing, whether it's right or not, is that the market is slowing, so they think, 'I no longer have to make my decision in a day or even a week. So I'm going to take my time.' They're doing that both because there's a lot of inventory out there and because they want to make sure that they're not the last guy to buy at the top of the market,' " Long & Foster agent Steven C. Wydler said.

Wydler and his brother, Hans, work as a team. Steven is based in McLean; Hans in Bethesda. When it comes to tips for selling, the two have a short but definite list.

"Focus your efforts on the things that are controllable," Steven Wydler said, "and ultimately, the thing that is not controllable is the market."

What is controllable? "Pricing, promotion, positioning and presentation."

On pricing, "realize that it is a different market than it was . . . and that the mentality that 'I'll just wait for the market to turn and it'll come back' isn't going to work."

On promotion, use as many avenues as you can. "The truth of the matter is you don't know where your buyer is going to come from."

To reach as wide an audience as possible, the Wydlers post properties on Internet sites as well as in national and local newspapers.

Wydler defined positioning as "understanding the market and the selling features of your particular home and what is attractive to buyers." Presentation means making the house look its best.

These basics -- setting a fair price and understanding the market -- never change despite the cycles in real estate, said Charlie Bengel, chairman of RE/Max Allegiance in Alexandria.

"I do remain relatively bullish on the market," Bengel said. "Our closed business in January and February was almost exactly the same as [those months] last year, which was a record-setting year for us. And it seems as though the market is still brisk."

But he said "there certainly are a lot more listings, and it's taking longer for properties to sell."

One of the reasons, he explained, is that "people are trying to move the market along and best the previous comps," or comparable sales prices, when it comes to the price they want. But prices have leveled off, he said.

"If sellers are realistic about pricing their homes, they will have a good chance of getting them sold in a reasonable amount of time," Bengel said.

Creig Northrop, a Long & Foster agent in Howard County, said: "The first two weeks are critical in listing a house." So his strategy is to make the right decisions upfront and then to use all avenues to advertise and market.

He also tries to "hit different markets" with his marketing. A house in Howard County would be worth $500,000 more if it were in Potomac, he said, "so I'm bringing those people across from other markets."

He said, "People will spend the money if they feel the house is priced at fair market value."

If sellers ignore his advice and go for the greed, "the market will respond and let you know what the value is. . . . And if the house sits too long, then potential buyers will want to know what's wrong with that house."