New Year's Resolutions for Those Braving the Market's Cold Waters

By the time the dust settles, one thing will be clear: 2008 was a year most home sellers, homeowners and lenders will want to forget.

Home prices have dipped for the past three years, including by double-digit amounts in many parts of the country in 2008, according to the National Association of Realtors. If that wasn't bad enough, November existing-home sales plummeted 8.6 percent, to a annualized figure of about 4.5 million. At the peak of the housing market in 2005, about 8 million new and existing homes sold.

At the end of 2007, I projected that 2008 would be a real estate market (heavily favoring buyers) made for strong stomachs. A year ago, some economists were already saying we wouldn't work our way out of this until well into 2009, 2010 or even 2014, according to one gloomy forecast.

My crystal ball is somewhat cracked, so I don't know what 2014 is going to look like. But as we move into 2009, the news doesn't look too good: 53 percent of loans that were modified to reduce the principal, payments or interest rate are already delinquent. Foreclosures continue to rise. And unemployment has suddenly jumped.

Loss of jobs means more people will be struggling to make their mortgage payments. Foreclosures will probably go up this year. Sellers will have a tough time. The vast majority of home sales these days are distress sales: homes that have been foreclosed upon and sellers who are "short" and are selling to get out from under the threat of foreclosure. As industry observers note, until we get rid of the backlog of foreclosed homes, the market doesn't look too good for homeowners who want to move on.

Overall, I don't think 2009 will be a great year for sellers. If you can wait until 2010 or 2011 to sell, you'll probably be better off. That said, if you must or want to sell, tackling a few New Year's resolutions might help:

· Overcome any possible objections a buyer might have.

Sellers often don't understand that their primary job is not only to eliminate any potential objections that would stand in the way for buyers to make an offer, but also to exceed their expectations. If your home is competitively priced and its condition exceeds a buyer's expectations, you'll get an offer -- even if it isn't the offer you want.

· Get my home into shape before I let anyone see it.

Getting a home into selling shape is quite different from even having a clean, beautiful home. You also need to stage your home, which means you have to make it look exactly the way a buyer thinks it should.