In a Slowing Market, Price Is Only the First Step

Vici Boguess of McEnearney Associates in Old Town Alexandria has one set of sellers trying to tempt buyers with a week's vacation on Kiawah Island near Charleston, S.C.

The townhouse near the King Street Metro station has been on the market since January, dropping in price from $575,000 to $542,000. The vacation "probably won't sell the house, but the owners thought that it might make an agent take an interest in it, enough to bring a client to see it," Boguess said.

Owners of a million-dollar house in Alexandria offered a free Mini Cooper as a bonus, "but it didn't work, and they sold the car when they had to move," said Dave Hawkins, managing broker for McEnearney in Alexandria. The house is still on the market, but the owners may rent it if it doesn't sell soon.

Another McEnearney listing advertises $15,000 that can be used for closing costs, an interest rate buy-down or "for decorating credits."

Some sellers are buying a home warranty designed to cover repairs of some mechanical systems in certain circumstances. Others are paying homeowners association fees.

"I had one that closed today where the . . . seller offered a closing-cost credit to pay the condo fees for a year," said Boofie O'Gorman, a Long & Foster agent in Reston.

Looking Good

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If the house looks like a dump, the traffic will pass it by. That's a basic lesson, Ireland said.

So the first step is to increase the curb appeal. "Clean up the yard. Plant a few flowers. Paint the front door. Add a new doorknob."

Others suggest upgrading exterior light fixtures and replacing ripped window screens. Foundation cracks, loose gutters or dirty siding will raise questions about the care and maintenance of a home.

Inside, remove or replace ripped or stained carpets, leaking pipes and broken lamps. Keep the house shiny-clean.

"If you're putting money into things, the kitchen and the bathroom are the best investments, and you're going to get it back," Ireland said. "But it doesn't have to be new. As long as things are in good working order, you're okay."

Hatter tells clients, "There's a $1 to $4 inverse relationship" between upgrades and prices. "For every dollar you don't put in, it costs you $4 in what you can sell it for."

Beyond clean is "staging," or making over the look of a house.

Brendan Haggerty didn't believe in the power of presentation when he listed his Silver Spring house this spring, but when the four-bedroom Cape Cod didn't move for 2 1/2 months, he was willing to switch to another real estate firm that emphasized the work of its on-staff interior design crew.

"I wasn't sold on the concept per se , but I was willing to try anything," Haggerty recalled.

After a two-day repackaging by agent Hanson's Pure Energy Team, the Cape Cod in Woodmoor drew an offer at the open house in early May. The buyer paid just under the listing price of $535,000. "It obviously worked," Haggerty said.

Prepping, or staging, houses is not new. But in a tough market, it's vital, Hanson said.

"Some [sellers] have very little to do. Others have quite a bit."

Haggerty's house was in very good shape, with nice furnishings, but needed "some cosmetic work," Hanson said. "We switched out some light fixtures that needed to be updated and removed a carpet to expose the hardwood floors."

The firm also moved in some of its own furniture and a rug, to "accentuate the positive" and eliminate clashing colors. There were also "a lot of toys everywhere" that had to be put away temporarily, and a room filled with playthings was turned into a study, Haggerty said.

"They also talked to us about the way the furniture was arranged in the house," Haggerty said. To make more space for the kids, the family had lined up most of the big pieces along the walls. "But they said that actually made the rooms look smaller, and they moved the furniture back into the center of the rooms."

The Auction Approach

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Though many agents say auctions are stigmatized by their association with foreclosures, Lilly DeGol, a Re/Max Allegiance agent in Alexandria, is "very happy" after recently teaming up with an auction firm.

DeGol worked with Homeland Auctions in Leesburg this month after her three-bedroom investment condo in Fairfax stalled for 90 days in the multiple listing system.

DeGol had bought the unit a year and a half ago and had seen a market change coming but was still surprised by the magnitude, she said. "I had done the usual marketing, reduced the price about $15,000 and offered closing cost help," she said. Still, there were no nibbles.

After she took a class on how agents can team up with an auction house, she "decided to use it for my own property." About 20 bidders showed up for the sale outside her condo building. The process sets a minimum bid that is the assessed value of the property.

DeGol also introduced a D.C. client to the idea, selling a Northwest townhouse at auction this month.

Homeland Auctions President Gloria "Lynn" Gardner said she "can't keep up with all the calls these days" and disagrees with the perception that auctions are second-rate. "We're doing for real estate exactly what a Fourth of July sale does for retail."

Nationally, auctions "are up, but they are still less than 1 percent of the market," said National Association of Realtors spokesman Walter Molony.

DeGol, though, is a convert, for now. "We got huge traffic" from the national print and online advertising that the auction firm can command by grouping sale notices, she said. "As Realtors, we usually do this the traditional way, but this is another option. And we need options now that the market has changed."