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In a Slowing Market, Price Is Only the First Step
The $435,000 contract was $10,000 above the listing price, but Zingg didn't pocket the extra money. It went to help the buyers with closing costs.
"We knew our strategy was going to be to price ourselves lower than other houses on our street," Zingg said. "We'd been watching for a couple months, as it was becoming more and more of a buyer's market. We'd seen sellers putting on prices that were too high and then trying to reduce them for quick sale. But that's like a red flag on a house."
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Zingg wanted to sell quickly because she and Williams had already bought a house, using an interest-only bridge loan recommended by agent Becky Fremont of Re/Max Olympic Realty in Manassas. She didn't want to keep that loan open for more than a month or two.
Some sellers need more convincing.
Mike Hatter, a Coldwell Banker agent in Arlington, said he had to work hard recently to persuade an 82-year-old homeowner and his adult children to give up on expectations of last year's prices.
Hatter said he knew the brick Cape Cod near Ballston would be a tough sell because "it was almost unlivable." But the owner wanted close to $750,000, based on neighbors' sales and a guarantee from an agent made over the phone.
But Hatter maintained not only that prices had dropped but also that the house needed at least $60,000 in renovations. "The shower stall upstairs had rusted out, and there was a leak, so whenever you took a shower there was water leaking into the kitchen," Hatter said. "The owner also didn't have a vacuum cleaner, so the house was filthy."
The owner finally agreed to ask for about $100,000 less than he had originally wanted and to offer closing help. With those changes, "We did get a buyer -- in less than a month. But we're lucky that we got what we got as quickly as we did," said Hatter.
Even a low price isn't necessarily going to do the trick, said Candy Clanton, an agent with Re/Max Allegiance in Fairfax. She says buyers are bargain-hunting.
"My clients have reduced their prices 50, 60 and 70 thousand in some cases, but they're just not seeing any traffic right now," she said.
Give a Little, and More
If cutting the price doesn't help, perhaps offering to give some of that money back to the buyer will work.
Financial incentives come in many forms. There's help with closing costs, whereby sellers agree to pay for buyers' settlement expenses, including the taxes and insurance payments. Seller contributions can also be used to "buy down" or reduce lenders' interest rates, or to pay bonuses to agents.
