The Puzzle of Pricing

The Lubers are empty nesters who are eager to downsize. They have already bought a newly built condominium that should soon be ready.

"I pointed out to [the Lubers] that five buyers had a chance to buy their house but chose to buy something else instead," Fairweather said. "By looking at what sold, you can pretty quickly figure out what your house did not have that caused it not to sell. Whatever it is, you can correct it with price."

That's when the Lubers dropped the price to $749,717. They wanted a standout number, hence the "717," which Sharon Luber considers lucky. The Lubers also painted the kitchen, installed granite countertops and refurbished the cabinets.

"The thing the seller has to know, especially after 30 days of feedback, is that there's a difference between price and value," Fairweather said. "If the buyer is not making an offer, then the price does not reflect value. Sellers can't control value. They can want it, wish it, demand it. But they can't control it."

The competitive pressures can be worse with condominiums because the location factor is neutralized, said Dan Melman, an agent at Long & Foster's W.C. & A.N. Miller subsidiary.

"At least with houses, you can say this block is different than that block," Melman said. "But with condos, potential buyers can see another home just like yours two doors down or two buildings down. They will have several things to compare at the end of the day."

Denise and Steve Newman worked with Melman when they listed their two-bedroom, two-bath downtown D.C. condo for $535,000 in June. A unit on a lower floor overlooking the garage had just sold for $505,000, about $5,000 more than the asking price. The Newmans figured that their sixth-floor unit, with its more scenic view, could do better.

They were wrong.

"What we didn't realize was that the sale was an anomaly," said Denise Newman, 40, a legal secretary. "It was the last of the good sales in the building."

The couple's first open house attracted a crowd, she said. Nobody showed up at the next open house a few weeks later. Newly built, more expensive buildings nearby were luring away potential buyers, she said.

The Newmans lowered their price to $520,000 and received what she described as an "insultingly lowball offer." They tried to work with it, but it fell through. They then dropped the price again, this time to $499,900.

"We looked at the competing condominium projects that were dumping hundreds of units on the market, and we needed to be out in front of it," Melman said. "We'd like more, but we have to be realists."

The Newmans want out because they have two boys, 4 and 2, and they said they've outgrown the condo. Their oldest son, Wilson, is nearing school age, and they are eyeing Montgomery County schools.

The couple took their home off the market in December because "it was a lot to keep the condo in show condition with two kids," Denise Newman said. Also, the prime selling season was well behind them by then, and the credit crunch was making it more difficult for prospective buyers to line up loans.

With a new selling season beginning, the condo is repainted and back on the market, still at $499,900.

Denise Newman said the price cuts have been palatable only because home prices in the Montgomery neighborhoods they're interested in also have dropped.

"We're getting shortchanged here," she said. "But we'll make up for it on the other end, hopefully."