Price It Right

"Losing" on Real Estate Price a Matter of Perspective
by M. Anthony Carr
Realty Times


When it comes to pricing your house when you’re ready to sell it, keep in mind you must sell in the market you’re in today. It doesn’t matter what your former neighbor got six months ago, or what properties are listed for now. All that matters is this -- whatever the last sale price in your neighborhood of your model -- that’s probably your sale price now.

When you’re looking at what you’ll gain on the sale of your house, let’s keep it in perspective. If house prices increased year after year at 4 percent per year and then suddenly people were selling their houses for 1 percent less than last year’s asking price, would that be reasonable? If so, then when property is moving up at 20 percent per year for several years and then suddenly you have to sell it for 5 percent less than the prices last year, would that be reasonable? The challenge is when we move from percentages to dollar amounts. If 5 percent represented $5,000, most people wouldn’t blink. It’s when 5 percent represents $25,000 that sellers start to freak.

In the DC area, we were experiencing astounding rates of appreciation as a region, 20 percent from 2004 to 2005 prices. Many homeowners have experienced a doubling in property values over the last five years. The average home price is now about $540,000, according to the local multiple listing system. Now, price appreciation has subsided and is sitting at a mere 5 to 8 percent region wide (depending on where you’re standing). Sounds pretty healthy, still, right? You would think.

However, there are stories from the field on how sellers are defending their prices as if their lives depended on it. While sellers are sitting on hundreds of thousands of dollars of equity, they can’t stand the idea of dropping their price by $25,000 or $50,000 to sell it today. The house that was $260,000 in 1999, is now selling for $569,000 today. But some sellers now want that same type appreciation and can’t imagine selling it for less than $589,000. Bringing it down the $20,000 or $40,000 to sell the property seems, well, just not fair.

What’s even scarier are the agents who are defending their prices in a correcting market. I have to keep in mind that nearly half the agents in the country (as well as here in the Capital region) were not in business five years ago. They’ve just now entered a market where prices have to be corrected, dropped -- improved, as it were.

However, as I talk with agents around the region about their listings, they’ll be the first to let you know, "It won’t sell for what the seller’s asking," but they’re too afraid to tell the seller the sobering news.

The market is like playing Russian roulette. Sometimes you don’t know what you have until you pull the trigger. Somebody needs to blink. Sellers seem to be saying to buyers, "I’ll drop my price, just make an offer." While buyers are blankly replying, "I’ll make an offer, just lower your price."

It’s this stalemate that has played a part in creating an abundant supply of houses on the market in the DC area. We’re talking upwards to 200 percent more homes on the market in any given year-to-year comparison. And, folks, after a dearth of homes in this area, it’s a good thing. Is it affecting prices? Sure thing. Will prices come down? Absolutely. Are sellers going to lose money? Well – in some cases.

For sellers staying in the same area, keep in mind, if you have to drop your price by 5 percent, then the seller of the house you’re buying (usually a lot more expensive) is probably doing to drop the sales price by about the same percentage point. It means that while you may "lose" money on the sale of your home, you’ll more than likely "gain" it on the purchase up.

Keep in mind, the market is the market. When it’s time to buy, buy. When it’s time to move, then sell. Work with the market you’re in, not in the market you wish it would be.

Published: June 16, 2006

Housing Industry

IBISWorld: Outlook for U.S. Housing Industry
RisMedia

Business information analysts point to a two-year housing market slowdown followed by a gradual rebound

RISMEDIA, June 13, 2006—The U.S. housing industry—developers, builders, Realtors and others—may understandably view National Homeownership Month (June) with mixed feelings. Yes, the housing market has enjoyed a sustained period of high demand and high prices in many parts of the country, but now the tide is turning.

Indeed, new indicators, including the increasing inventory of unsold homes languishing on the market, point to a rapid cooling of the U.S. housing market in many once-hot areas.

Detailed market analysis recently published by business information analysts IBISWorld (www.ibisworld.com) underscores the trend and points to a two-year housing market slowdown followed by a gradual rebound.

Snapshots of the nationwide outlook for various components of the U.S. housing industry:

SINGLE FAMILY HOUSING CONSTRUCTION: The value of single-family housing construction is forecast by IBISWorld to decline by -4.9 percent in 2006, and -5.6 percent to a cyclical trough at around $380.3 billion in calendar year 2007 (in constant 2005 prices). The number of single-family housing starts is also projected to decline over the short term to a cyclical trough at 1,520,000 units in 2007 (-11.4 percent over two years). Industry revenue is forecast to decline roughly in line with the value of new housing construction, falling by -2.7 percent in 2006, and -4.2 percent to a cyclical trough of around $340 billion in calendar year 2007 (in constant 2005 prices).

MULTI-FAMILY HOUSING CONSTRUCTION: The outlook for the multi-family housing construction industry is for subdued cyclical growth in revenue averaging 1.5 percent per annum to December 2010, lagging well behind the projected pace of US GDP growth of 3.0 percent per annum, but corresponding with the projected weak average growth in the value of new multi-family housing construction, and the volume of multi-family housing starts.

LAND DEVELOPMENT: The land subdivision and land development industry is forecast to record subdued revenue growth averaging 1.5 percent per year to December 2010. The weak growth profile stems mainly from the projected downturn in the housing construction market and a more subdued pace of growth in residential property values.

RENTALS: IBISWorld forecasts slow real growth in gross rents received by lessors of residential buildings and dwellings. Investment returns from rental housing will be adversely affected by several factors, including: slow or negative real growth in capital values over the outlook period (following a period when capital values grew at a rapid rate); relatively high rental vacancy rates; and a rise in interest rates.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Questions and Answers

Ask George & Chuck: Questions from Consumers
Realty Times
by George Stephens & Chuck Jacobus

Question: I had mentioned to my neighbor (she is also my friend) that my house will be on the market by the end of the year. She has expressed an interest in buying it for her elderly mother. My friend would continue to live in her house while her mother would live next door.

Are there any special precautions that I need to take before this transaction actually comes to fruition? Since I wouldn't necessarily need to contact a Realtor, how would the appropriate paperwork be drawn up as well as other necessary requirements whatever they might be?

Answer: Unless you have a great deal of experience in buying and selling real estate, we suggest that you hire a Maryland real estate licensee that has a verifiable reputation in the marketing and successful sales of homes in your area. You could also hire a real estate attorney but the attorney will most likely be more useful in telling you which forms need to be used and what disclosures you need to make whereas a real estate licensee -- as we've described in the previous paragraph, should be able to provide you with the forms and disclosure information as well as important marketing advice and reports such as the best price to ask for your home in the current market, for only one example.

You appear to have a good and justifiable plan for the sale of your home to your friend. And that is exactly why you should have an objective representative who is bound by law to represent your best interests, such as a real estate licensee. Your home is a valuable asset. It is the most valuable asset most people own. However, when two friends get involved in a real estate transaction, it is our recommendation that both be represented by real estate licensees.

Friends tend to trust each other too much and let too many things be overlooked. It isn't a bad thing, just sloppy business procedures that can dissolve friendships quickly.

Question: Do you answer questions regarding issues outside of Texas?

Answer: Yes. If you read the Houston Chronicle, or TexasRealEstate.com, or some other website in which we appear, check out RealtyTimes.com. It contains article written by us but that are completely different and original content.

Once there, select "About Realty Times" then select "Our Columnists" from the drop-down menu. Ask George & Chuck is the first grouping in the left-hand column. When you select it, you can open a list of the articles we've published. They are usually scheduled for publication on Realty Times the second and fourth Tuesday of each month.

Question: I am currently being charged for hazard insurance through my escrow that is rolled into my mortgage payment. I also have a comprehensive homeowner's policy that I pay separately. I do not live in an area that would require extra insurance (flood). Do I need both? I was not aware I should not have both until I found out from a friend that just bought a house. Thanks for your help!

Answer: Some of what you stated in your email to us does not make sense, unless you have two different insurance companies and one of the policies is being paid out of your escrow account and the other you are paying directly. If that is the case, you need to communicate with the agent or agents representing the insurance companies and inform the insurance company because you are being charged for double coverage. However, before you do that (since we believe you are not being charged double), please read on.

We need to make sure you understand and are using the correct terminology to describe the different types of "insurance" policies, as follows:

Title Insurance: Owner's (or mortgagor's) Policy -- Usually a one-time fee paid by either a buyer or the seller (and in many cases by the seller) to make sure there is an unbroken chain of title to the property you purchased which enables the Title Company to issue a Title Insurance Policy to the purchaser (you) guaranteeing good and marketable title;

Title Insurance: Mortgagee's (or lender's) Policy -- Usually a one-time fee paid by the buyer that guarantees the lender that there is an unbroken chain of title on the property against which the lender is loaning the buyer purchase money;

Mortgage Insurance (also referred to as PMI, MI, or Up Front MI depending upon the type of loan) -- This is an insurance policy that a lender may require when a down payment is less than 20 percent of the purchase price, that guarantees the lender against a default by the purchaser (you);

Homeowner Insurance -- Covers various hazards such as fire, wind, hail, theft, etc. It is sometimes called a "Comprehensive Policy;"

Flood Insurance -- This is a policy that provides coverage against rising water only and the premium is based upon the official flood zone map.
In most cases, if you are paying a Comprehensive Homeowner's Insurance Policy yourself, then the insurance the lender collects through your escrow account is Mortgage Insurance. Flood Insurance can be required by your lender if you are in a flood-prone zone according to the official flood zone map, or you can choose to have this insurance, which is a good idea. Either way, you can pay it through your escrow account or you can pay it yourself. Your closing or settlement statement (identified as a HUD-1) will list all the charges to your side of the statement (the left side) that were paid by you when you purchased to property.

We therefore recommend that you communicate with the insurance agent who represents the company you are paying on your own to check what insurance policies you have in place and whether or not you are paying Flood Insurance.

Question: I apologize in advance if you have already answered a question of this nature. My husband and I recently purchased some land 1/2 mile up the road from where we live now. The school district was essential as we didn't want to change where our kids were already going and we are both graduates of the district.

Now, we are almost finished with the building of our new home and find out the listing was incorrect and we are in a different school district. After contacting the listing Realtor, he apologized for the error, and explained that he knew the correct school district and didn't know why he listed it wrong. He offered for us to finish building and then he would discount his commission and sell it for us.

It just doesn't seem adequate as we've worked very hard towards this dream and designed the house ourselves. I know you don't give legal advice but can you just tell me if this is a common occurrence? And how it is usually dealt with? I have contacted a few attorneys who don't seem to have experience with this. Our kids are middle-school aged and active and settled with their current district and friends.

We never would have bought this property had it been listed correctly and feel there must be something in place to protect us from this kind of thing.

Answer: There are at least two schools of thought on how best to deal with this situation:

That is the type of error an Errors & Omissions insurance company usually handles. The Listing Realtor from whom you bought the land should have E & O coverage, but if he does not there is a chance that his business insurance policy may have applicable coverage. Either way, you need to contact a Missouri Attorney who is experienced in litigating real estate matters. If you do not have an attorney, check out the Missouri State Bar Association's website at mobar.org.

One of the problems you are most likely going to encounter is the proximity to your existing home and the land that you purchased from the Realtor being only 1/2 mile up the road. Said another way, if it was so important that your children remained in the same school district, why did you not check out the location of the unimproved land with the school district before you purchased it?

We believe that the listing agent clearly misrepresented the school district issue according to your allegations, so you really did not need to question beyond that. However, the listing agent also offered a compromise that was not unreasonable. You could very well suffer no economic loss other than the time in selling this property and buying another. A settlement is almost always better than the expense of protracted litigation. However, make sure you get this listing agent to commit to his agreement with you in writing. Make sure you take into consideration all of your expenses in connection with the listing agent's error.

The advice that goes with both recommendations is to: 1. hire an attorney; 2. remain in your existing home if you can (or rent a temporary home in the correct school district if you cannot); and, 3. have your attorney speak with the listing Realtor who sold you the land, to work out the details of any compromise agreement that might be available to you. However, you should probably inform the attorney that you are not seeking protracted litigation.

Published: June 13, 2006

Baby Boomers

Baby boomers investing in real estate
Prosperous age group sees additional property as a good investment.
By Julie B. Hairston

THE ATLANTA JOURNAL-CONSTITUTION
Saturday, June 10, 2006

ATLANTA — Like many empty nesters, Dennis and Julie Doll have inaugurated their post-child-rearing, pre-retirement years by buying a house more suited to their current and future needs.

Thinking ahead to the next stage in their life, empty nesters Julie and Dennis Doll bought a house in Georgia surrounded by 1 acre of wooded land. Others like them are buying condominiums.

"My wife's mother has knee problems and couldn't come visit us in our last home," Dennis Doll said.

Now making up 42 percent of all U.S. homeowners, baby boomers such as the Dolls have become the focus of the 21st century housing market. In a recent Harris Interactive survey, the National Association of Realtors has been measuring the desires, habits and plans of these homeowners between the ages of 41 and 60.

The generation that sang rock anthems about getting back to the land has done it in a way most did not initially envision.

The rural communes of their youth have evolved into sleek, amenity-packed urban condominium communities. Beach and mountain homes now satisfy their taste for back-to-nature security.

Awash in a lifetime of earnings, equity and inheritance, millions of baby boomers are investing their futures in real estate.

The 77 million U.S. baby boomers are now in their peak earning years, with the survey showing they account for 55 percent of American households with more than $100,000 in annual income.

In addition, many anticipate becoming the recipients of significant inheritances from their thrifty Depression-era parents during the next 10 to 15 years.

The Realtors' survey shows that as many as a quarter of America's baby boomers now own more than one piece of real estate. That's almost 20 million buyers for second homes and investment properties.

Ten percent of the boomers surveyed said they expect to buy or sell real estate in the coming year. If that sample holds true throughout the age range, it would generate almost 8 million sales over the next 12 months.

Robert and Joan Tufts, both 56, are among those second-home owners expecting to complete the transition from their current location to their favorite vacation locale — permanently and in the not-too-distant future.

Although their primary residence is in an Atlanta suburb — a home they downsized into after their last child moved away — they now split their time between there and a beachfront condo near Sarasota, Fla. The Tuftses also have bought a single-family home in the Sarasota area, where they plan to live full time after Robert retires.

"We found something we liked in November and used our equity out of the condo to put a down payment into the house," Joan Tufts said. "A lot of people we know here are doing that."

The movement of baby boomers such as the Tuftses and Dolls to new homes for their current stage of life — and the purchase of possible retirement homes that often begin as vacation retreats — is a significant driving factor in today's real estate market, said Paul Bishop, the National Association of Realtors' research manager.

"Because there are so many baby boomers in the leading edge (of the age demographic), buying vacation homes is going to be a pretty strong part of the market," Bishop said.

The survey also shows that boomers, who have ridden the recent real estate price surge into prosperity, see such purchases as part of a sound financial strategy.

All but a paltry 4 percent of the survey respondents see homeownership as a good investment.

Real Estate Questions and Answers

Ask Realty Times
Realty Times
by Peter G. Miller


Question: I own a business and currently have it on the market. My broker had an offer on the place which I agreed to. The expiration date on the buy and sell agreement came and went and I learned it was my broker that was the buyer. He formed his own LLC corporation and put it down as the buyer. He never placed the money into the escrow account. My property was tied up for months. I call his office and visited his office and he is never available. What can I do?

Answer: If what you say is true, if what you say can be verified, you should immediately contact real estate regulators. Be sure to hold onto all written offers and other documents. Regulator contact information can be found at ARELLO.com.

In most jurisdictions, if not all, a broker has an obligation to disclose any personal interest in the purchase or sale of a property. This disclosure requirement routinely extends beyond the broker directly.

As an example, Maryland real estate regulators say that a "licensee may not acquire an interest in, or purchase, personally, for any member of the licensee's immediate family, for the licensee's firm, for any member of the firm, or for any entity in which the licensee has any ownership interest, property listed with the licensee or the licensee's firm without making the licensee's true position known to the listing owner. In selling or leasing property in which the licensee, the licensee's firm, or any member of the licensee's immediate family or the licensee's firm has an ownership interest, the licensee shall reveal that interest in writing to all parties to the transaction."

In the case of a home that a broker has listed and then wants to buy, the broker may have inside information obtained in his role as a listing agent that would not be available to an arms-length buyer.

Moreover, the broker helped set the price and terms of the sale. The potential for conflict is enormous.

As to deposits and such, the purpose of a deposit with a buyer offer is to protect seller interests. Most jurisdictions have strict rules regarding escrow funds.

Lastly, when a broker lists your property he is your agent. If he is also buying the property he plainly has an adversarial position.

Brokers should be allowed to buy properties, including in certain circumstances properties they originally listed. However, in such instances it is necessary to assure that a seller has separate and independent representation as well as full and proper disclosures.

Question: How do I find what area in my city is the most attractive to home buyers?

Answer: You might check two numbers with local brokers: First, how long do homes remain on the market in various neighborhoods. Second, what percentage of asking prices are actually received by sellers.

Question: I have a problem with a title company that I used to close a house. After three written letters to the company they're unwilling to resolve an issue that they should correct.

Answer: Did you send your letters by certified mail with a return receipt? That may help.

There are two steps you can take. First, you can have an attorney review the matter and then send a "demand" letter if appropriate. Second, you can file a complaint with your state insurance commissioner.

Question: I placed my home on the market about 60 days ago at $539,000 with a broker. At the time I spoke with a reputable appraiser who indicated that this was appropriate. We dropped our price twice and it's now at $515,000. We have only had a few walk-throughs in the last 60 days. Good feedback on look and price -- just not the right house for each.

My broker has indicated that this price range in this area is a very tough one right now. How do I know if this is true or not?

Answer: If the broker was wrong the house would have sold.

Your situation reflects a reality in many markets: Homes are taking longer to sell and as they remain on the market longer, prices are moderating. In the context of your sale, the asking price has fallen less than 4 percent and that's hardly unreasonable.

Your feedback has been good, so what you really need is more traffic. Speak with your broker about the next steps which need to be taken that would be most effective in your marketplace.

Question: What should I do if a seller refuses to move out? Escrow closed in April. We let her stay in the home as part as escrow agreement for 30 days after escrow closed. We extended that till the end of May. She still will not leave. What is our next step?

Answer: It's your property. Charge rent on a daily basis -- and have the rent increase 10 percent each day. Then take the seller to small claims court to collect. However, if you're in a community with rent control charging "rent" may set off certain requirements that you want to avoid. Speak with a local attorney for details.

Question: I'm planning to build four duplex units. As interest rates are rising, I'm trying to get an accurate picture of the local rental market and what a realistic rent expectation should be. This is needed as I want to compare the information to my financial costs, construction, taxes, insurance, fees etc.

How do I conduct an analysis?

Answer: You're best investment option is not building four duplex units anytime soon. You lack the most basic information needed for investment decisions. If you were to start such construction at this time the probability of success would be just about zero. Put another way, you would be chum for marketplace sharks.

If real estate investing is of interest, then you need to learn the game. The easiest way to start is to get a real estate sales license so you can get the basics. Local real estate brokers can tell you more.

Question: My vacation home is part of a large number of homes 'For Sale' in my community. It's a buyer's market. I'm hoping to take advantage of the summer market to make a sale. My home is listed with a broker, but is there is anything that I can do on my own to display my property on as many other venues as possible, for instance the Internet?

Answer: When you retained a broker to sell your home that individual must have presented a marketing plan which would be appropriate for your community and your specific property. In this era, brokers routinely post homes online with MLS systems, their web sites, their broker's website, perhaps their franchise and in other ways. Also, when homes are advertised in local newspapers and real estate guides, such ads also appear online.

Most probably the best thing you can do is to review the marketing plan with your broker to assure that all promised promotions are underway and to keep the house clean and neat in case would-be buyers drop by with little notice.

Question: We recently signed a contract to purchase an existing home for $236,000. The appraisal came in at $226,000. We have already paid the $100 offer fee, the $300 appraisal fee, the $75 pest inspection fee, the $200 home inspection fee. If we now back out of the contract because of the low appraisal what are our liabilities? Will the seller have the right to sue or demand damages?

Answer: You need to read your sale agreement. Does it require that the appraisal must equal or exceed the sale price? If yes, what you have is a contingent agreement -- and the appraisal was not satisfactory.

If you did not have an appraisal contingency does the agreement say that you will obtain a certain level of financing and only put so much down? If the property does not appraise for the sale value then you may not be able to get the financing required by the agreement. In effect, the financing requirement may offer another contingency.

All of this is conjecture, however, You need to have an attorney look at the sale agreement to determine exactly what it says -- and does not say.

Question: I bought an expensive house ($1.3 million) with the typical disclosure statement from the owner (all items checked "no"). I also had a home inspection. After closing and moving into the house, we discovered it had significant rot on dormers and chimneys and that the asphalt shingle roof was at the end of it's life expectancy after only 14 years old. A missing chimney cap was replaced but there was no mention of rot on the chimney facing. The owner was older and probably was never on the roof. The inspector was older and didn't go on the roof, but looked at it with binoculars! The estimate on repairs including new shingles is over $25,000. Any suggestions?

Answer: Seller disclosure forms are useless because owners in good faith often do not know the answers to various questions. The use of a home inspector was a good idea. The age of either the seller or the inspector is irrelevant, the important measure is capacity.

The question to be asked is whether the inspector's use of binoculars is a standard and reasonable practice in your jurisdiction. Was it the inspector who recommended replacement of the chimney cap?

How was the rest of the damage detected? Did the inspector recommend a physical inspection by a roofer?

Before going further, it seems unusual that a 14-year-old roof would need replacement. At the very least, have another roofer take a look and give you an estimate. You may get a different result -- and you may discover that your inspector was right.

Question: My loan was sold but I was never notified. Nothing. What can I do?

Answer: The fact that your loan was sold is not an issue -- lenders have a right to sell loans. However, they also have an obligation to make sure that you know where to send your payments and that accounts are properly kept. As well, the loan terms cannot be changed by the new lender.

Under RESPA -- the Real Estate Settlement and Procedures Act -- if you send a full and timely payment to the old lender then the new lender cannot charge a late fee or other penalty for 60 days. Since there are penalties for lenders who violate RESPA standards, most lenders will do what they can to assure that you're able to make payments to the proper address.

If you have questions or concerns, contact the new lender by certified mail with a return receipt requested. If that does not work, contact the consumer affairs office of your state attorney general.

Seller Information

Pricing Right Sellers' Job No. 1
Realty Times
by M. Anthony Carr


It seems during a slowing market, the last person to get the message that the house needs a lower price is the seller. After all, the seller has the most to lose by "improving" the price and it's a tough decision to let go of a dream of cashing out.

A sellers market builds over time. If new jobs enter a particular area and housing doesn't keep pace, home shortages create a sellers market where prices increase and bidding wars begin. Then, one of two events happen to make a market cool down: the economy stops growing or prices become too expensive (combined with an ample supply of rentals). A normalized/buyers market is born and sellers need to get on board or hit the showers.

In the Washington, D.C. area, jobs are continuing to enter the market at a projected rate of 65,000 in 2006 (which is on top of more than 70,000 new jobs in 2005). According to the Center of Regional Analysis at George Mason University, the area has a deficit of housing by about 160,000 units. With plenty of rentals available this past year and skittish buyers, the area has just come off one of its hottest markets ever. It's cooled, slowed, normalized.

When people ask if it's crashing, I just point out that if you were driving at 120 mph and slowed to 75 mph, how would it feel? The lower speed limit may seem a lot slower, but it's still faster than the speed limit. We're running at that fast, but slower pace, now.

Nevertheless, as inventories grow and days on market increase, those in the business know what will sell a house more than anything else -- a price correction. Call it "reduced," "price cut," "realignment," "price improvement," "repositioning," or whatever you want -- the price needs to come down to where the buyers are biting.

I've collected quite a few excuses that sellers and some agents hold onto, instead of biting the bullet and bringing down the price.

"My house is worth it." Well, according to who? Usually, this statement is followed by a shopping list of items that have been added to the house: hardwood floors, 9-foot ceilings, new appliances, upgraded bath/kitchen, you name it. Yeah, your house is unique, just like everybody else's. The reality is while your house may have all those neat amenities, so do the other dozens, scores or hundreds of homes in your market area that are also on the market.

"It's a great looking house." It better look great if it's going to beat out the competition. Location, price and condition will always be a factor in any market. It may look great, but looks have nothing to do with real value. When you start thinking that your house pales all the competition it means one thing you probably haven't seen other houses like yours on the market.

"I have to get this much or I can't sell." Oh, I really like this one. What a seller needs doesn't matter to the buyer. The buyer is looking for as much value in a community of high-priced houses. In the DC area, the average price lingers around $550,000. For that price, many buyers want the house to look good, have plenty of amenities and be connected with a realistic seller who is motivated.

"If I can't get my price, then I'll take it off the market." My question to that statement is: "Then why are you on the market to begin with?" Look at what it's going to take to sell your home and realize your true goal -- getting that next property. Looking at only what your house will draw is too short sighted. The real question is, "What kind of deal can I get on the next house?"

The reality of most sellers, when they are dropping the asking price, is that they are still walking away with a boatload of money, just not as much as they wanted. They really haven't "lost" anything. They've doubled their gain. When pricing your house, look at these hard-core realities: what were the last few "solds" in my type of home; what is my true goal -- to get a certain amount of gain, or to get to the next house; and, finally, am I really in the game or am I playing around? Get serious. Price right. Get the next home of your dreams.

Published: June 9, 2006