Selling Your Home in a Cooling Market

Updated on May 2, 2008.

SELLING YOUR HOME in a cooling market is stressful at best. A couple years ago, headlines screamed of bidding wars and of homes moving off the market within days. No more. Across the country, new home prices are down from one year ago. And many predict housing prices will fall farther before they're done.

So if you plan to sell your home in the near future, call a handyman to make sure everything is in working order. Then take a close look at your local real-estate market and find out what's selling, what's not and why. Finally, don't expect to get more for your house than your neighbor got a year ago. This is a different market, warns Nelson Zide, co-owner of ERA Key Realty Services in Framingham, Mass. Look at more recent sales data and price your home accordingly.

That said, can you still get a good price? You bet. Here are some more tips to help you get top dollar for your house.

Price, Price, Price
Selling a house is all about price. Ask too much, and you could get stuck with a home that languishes on the market. The longer it sits, the harder it is to unload. "The first question a buyer asks is how long the house has been on the market," says Pamela Liebman, chief executive of New York-based real-estate firm the Corcoran Group. "If it's been on a while, they ask what is wrong with the house."

Ironically, homeowners who ask more for their homes tend to get less in the end. According to Liebman, studies show that if you price your home properly it will sell faster and at a higher price than if the home was priced aggressively. "Overpricing leads to low bids," Liebman says. "Proper pricing leads to high bids."

So how do you set the right price? First, take a look at recent sales in your neighborhood. And don't forget to factor in the condition of your house. A home buyer in a more neutral market is still going to pay up for a new kitchen with Poggenpohl cabinets and a Sub-Zero Refrigerator. But in markets glutted with inventory, these items are unlikely to add much value to a house, says Jim Cory, editor at Replacement Contractor magazine. And, if you failed to notice that Harvest Gold stoves and countertops went out of style with bell bottoms and love beads, you had better be prepared to drop your price by about as much as it would cost a new owner to renovate your relic.

Curb Appeal
First impressions are everything. The last thing you want is to turn off a potential buyer before he or she walks in the door. So make sure the house is painted, and call a landscaper to get your lawn in tip top shape. "If your grass isn't green, make it green," Liebman says. "If you have weeds, get rid of them. If the shrubs are overgrown, cut them." Even small, inexpensive potted flowers can make your home seem more inviting.

Renovations
Some renovations are worth an investment. An extra bathroom always makes a home more saleable, says Cory. A few cans of paint and new carpeting could also provide a handsome return. In addition, given the rising energy costs, buyers are now looking for energy-efficient improvements like reroofing and new siding and windows, says Cory.

Fix Everything
Make sure everything works. Have an inspector assess everything from your water heater and furnace to your central air conditioning system. "If there are any doubts about the mechanical functions, a buyer will walk," Cory says.

Even minor repairs are crucial. Hire a contractor to go through your home with a fine-toothed comb. Make sure the gutters are cleaned and the tub has new grout and caulk in the joints. Every window must slide open, and kitchen cabinets should open with ease. And don't forget to paint over ugly water stains. If you don't, a potential buyer could see it as a warning sign of a larger issue.

If you're inclined to leave your home as is, prepare to drop your asking price. "I hate to say it, but price cures everything," says Era Key Realty's Zide. Historically, buyers negotiate two dollars for every dollar of reported deficiencies, according to home-inspection company HouseMaster.

Additional Tips
There's some basic advice that's worth repeating. Keep your home as clean and as pristine as possible. This means cleaning out your closets and getting rid of excess clutter and furniture. You want your home to look as spacious as possible. The Corcoran Group's Liebman even suggests fresh flowers. "Baking cookies could be a bit silly and obvious," she says.

How long will all this take? Give yourself a good six months. It takes time to plan, and then to coordinate projects with a contractor or handyman. Just know that the hassle will be worth it. With a little hard work, you can get the best price for your home in any market.