Homeowners in San Antonio are selling their homes in about two months. In Detroit, by contrast, homes are sitting on the shelf for more than a year, and anxious sellers are having to cut prices to draw buyers. The National Association of Realtors released home-price data for 148 metro areas Monday, showing that the median price for a single-family home fell in 45 metro areas, and that nationally, the median price fell 1.2% from last year.

Whether your own area has a glut of homes for sale or is posting double-digit price gains, if you’re looking to buy or sell a home these days, you need to do all you can to compete.

We asked the CEOs of two of the largest real estate firms in the country for their advice.

Jim Gillespie, CEO of Coldwell Banker

Advice for sellers

Price it right. The most important thing is to get the price right from the get-go. When homes are on the market for a long time, they get stale in the eyes of the consumer and in the eyes of the agents.

You should have your Realtor show you comparable properties that have sold in the past two to four weeks. You need to look at the most recent “comps” you have  very similar homes in your neighborhood.

Second, have your Realtor show you listing sheets of properties that have been taken off the market because they were priced too high.

Home inspection. Have a full home inspection and report on the dining room table.

Get fixed what needs fixing. The invoice that is paid to the contractors who performed the work should be there, too.

If you’re in a buyer’s market, think incentives. Examples would be to help lower the buyer’s interest rate, offer to pay six months or a year of real estate taxes or offer to pay a portion of the buyer’s closing costs.

If it’s a condo or a town house, offer to pay six months or a year of the homeowner’s dues.
If the buyer is stretched for the loan amount, offer to pay off some of their bills so they qualify. It’s good to put a deadline on your incentives.

Curb appeal. Make sure that the shrubs are trimmed, the house looks good from the outside, that there’s curb appeal, and then that there are neutral colors inside. Store clutter in the basement or a storage locker.

Advice for buyers

There’s still competition. Buyers can afford to be choosy and look over the inventory, but they must realize that if they see the house that fits their needs, they can’t dillydally.
Buyers need to understand this is the third-best year in history for (home) resales. There are a lot of buyers out there. Right now, they have the advantage of a lot of inventory, and until it burns off, there won’t be much appreciation.

In those areas where homes are depreciating, don’t try to time the market, because most of the time when you time the market, you lose.

Understand your mortgage. Watch the mortgage rates and go to a lender that has a good reputation. Don’t be tempted by these subprime loans (for those with impaired credit) unless you can stand the worst-case scenario, and be careful of adjustable rates for the same reason.

Ask: “How often is the rate going to go up? What’s the interest rate cap? Is there a prepayment penalty?”

Ron Peltier, CEO of HomeServices of America, which owns 20 real estate firms nationwide, including Prudential California Realty

Advice for sellers

Pricing power. If you are selling a home characterized as a first-time-buyer home, you have an opportunity still today to price it at the high end of the range in most markets. We don’t have excess inventory at the low end, so sellers could think about holding firm to that price.

As you move up the scale for discretionary buyers  the first trade-up home  you still have the opportunity to price your home at the upper quartile of the market, based on comparable sales.

Even in hot markets, sellers need to be patient given the timing. It is the lowest point of the cycle because of the holidays.

Dress it up. Make your home extremely attractive relative to the competition, by dressing up the home and making sure it’s not cluttered. People really, truly buy homes on emotion.
Ten feet outside the home and 10 feet inside the home, what they call curb appeal and eye appeal are really important. Making certain there is no clutter inside or outside the home will help you realize the highest value. Turn on lots of lights, play soft music, showcase the house in the most positive light.

The open house. Make certain the home is available for showing. Oftentimes, people put in so many restrictions, it’s not easy to sell. If you’ve got buyers who are serious, buyers this time of year, you want to accommodate them within reason.

Advice for buyers

Know your market. If you’re a first-time home buyer, you really need to be educated on what the real market facts are. There is a perspective out there that houses’ values are off significantly, and in places like San Antonio, they are not. The market is solid, and homes are selling at 98% to 102% of sale price.

Think resale. Look at properties that are in attractive resale neighborhoods. Oftentimes, people think they’re going to be there a long time, but the reality is things change. Have a firm offer contingent on a home inspection. People buy on emotion. But what’s really important is making sure mechanical and structural components are compliant and sound.

Know your mortgage. Get prequalified for a loan, and make sure you understand different types of mortgage products. Unfortunately, people have been influenced into taking a mortgage that was an interest-only or negative amortization loan and bought to their maximum level. If that ARM resets and goes up 2 percentage points, it can dramatically change their monthly payment.

Look at new homes, too. Look at inventory of builders, because many builders have oversupply. It’s very likely they are making some concessions that an individual seller, who is selling their pride and joy, would not be very likely to consider.

Tide could turn. For buyers and sellers, what we’ve seen across the country is a rolling boom, where it didn’t hit every market at the same time or same duration, and the slowdown has hit different markets at different times. San Antonio, for example, looks pretty good, but that does not presume that it, too, won’t have a bit of a slowdown sometime in the next three to six months.

Source:

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