Priced to sell

With many sellers decrying a soft housing market, others find they can solve the problem when they set the price tag.

By SUSAN TAYLOR MARTIN, Times Senior Correspondent
Published December 9, 2007

Jean Schramm, an agent with ReMax Action First, stands in front of a home in the Placido Bayou gated community in St. Petersburg that she sold for $412,500.
	[Willie J. Allen Jr. | Times]

ADVERTISEMENT [Kathleen Flynn | Times] A tear down from an estate, the '50s era house is on "a really nice sized lot on a canal that leads out to the Hillsborough Bay. There are no tree issues. This is the thing people are looking for," said Lance Williams, an agent with Preston & Farley.

No matter where you look in the Tampa Bay area, you're sure to find them:

Houses that have been on the market so long two hurricane seasons have come and gone.

So long that babies have been conceived and born - and started walking.

So long that the "for sale" sign seems a permanent part of the landscaping.

Then there are houses like the mid-'50s ranch on a waterfront lot on Tampa's Davis Islands. While similar but higher-priced places have languished for months, the seller accepted a contract for $1,035,000 in just five days.

"We decided to put it at a price where we knew it would sell, and we got lots of attention immediately," says real estate agent Lance Williams. "I wish I could say it was magic on my part, but the best marketing strategy anybody can use now is really pricing it right."

As unlikely as it may seem, many houses are being snapped up quickly despite a real estate market ravaged by speculation, risky loans, foreclosures and fraud. In the greater Tampa Bay area, almost 5,700 houses and condos have sold this year within 30 days of going on the market. But as Williams, a former TV reporter, and other agents know, pricing, pricing, pricing has replaced location, location, location.

"Price is the most important factor by far," says Poul Hornsleth, owner of a Gulfport real estate agency. "You can start high but it will turn into a stale listing, and you don't want to get a stale listing."

To get an idea why certain homes sell so fast, the St. Petersburg Times looked at 10 in Pinellas, Pasco and Hillsborough counties that were under contract within a month of when they appeared on the Multiple Listing Service or MLS. Sale prices ranged from $105,000 to more than $5-million, but in every case the sellers priced their homes very competitively or accepted a lower-than-list offer.

* * *

That the houses sold so quickly is even more remarkable considering the competition they faced. The Pinellas Realtor Organization, which tracks all MLS listings in the three counties, has 43,300 active listings - about five times as many as in 2001.

"We're in an average market. We're selling about the same amount of property as five or six years ago," says Jim Belcher, an agent in St. Petersburg. "It's just that everybody is comparing it to 2004 and 2005 when there was an all-time record high, and you can never maintain all-time record highs. It's like the stock market. Things go up and down."

Of houses in the most common price range - $200,000 to $400,000 - those that sold in November a year ago had been on the market an average of 75 days. By this November, the figure had jumped to 109 days. At the current rate of roughly 2,000 sales a month, it would take almost two years to clear the existing inventory.

The bottom line: Most homeowners won't be able to sell for what they might have at the peak in 2005 when median prices were 30 percent higher than they are now.

"People need to understand that the market has gone back to 2004 and 2003 prices," says Bob Memoli, a Pasco County real estate agent. "If you don't price that way, it's just not going to move."

* * *

Conversely, sellers who are flexible often see faster results.

On Sept. 7, Memoli listed a three-bedroom, two-bath house in New Port Richey for $199,900, a "super competitive price" compared to others in the neighborhood, he says. Less than three weeks later, the seller had a contract, largely because she agreed to drop the price slightly and pick up part of the buyer's closing costs.

"She said, 'I don't want to leave this on the market six or nine months. I want to get on with my life,"' Memoli recalls. "She was realistic."

It also helped that the woman, a retiree planning to downsize, had paid $125,000 for the house several years ago and had substantial equity. Such sellers are in a better position to compromise on price, unlike "upside down" homeowners who got 100 percent financing and now find their houses worth less than the loan amount.

Pam Douberly, a Pinellas real estate agent, says most buyers searching in a particular area won't even look at houses in the upper price range. So she encourages sellers to set their price in the lowest 20 percent - a strategy that paid off when she got a Clearwater house under contract for $212,000 in nine days.

"There is a tendency to follow the old method, which is to look at what sold in your neighborhood and if the house down the street sold for $250,000, mine should too," Douberly says. "But in this market it's not about what sold, it's about how I'm going to compete with other homes on the market."

The owners of the Clearwater house, who inherited it from their mother, first tried to sell it themselves for $250,000. But after months with no offers, they turned to Douberly because she knew the area and could market it better.

"Being 1,300, 1,400 miles away, it was just logistically impossible" says Bill Wharton, a certified financial officer in New England. He says he had no problem with the final price "because I knew how the market was going."

* * *

One big obstacle to quick sales is that lenders have tightened their standards because of the subprime mortgage debacle, making it harder for buyers to get financing. Kim Poor, an agent in Brandon, stressed that point when she encouraged a seller to accept a lower offer from a buyer with good credit.

"If you have qualified buyers who are willing and able to pull the trigger in this market, you can't really let them get away," Poor says. Partly as a result of a $10,000 drop, the house sold in 27 days.

While price is the single most important factor in most sales today, real estate agents say it doesn't hurt to have a house that boasts especially desirable features.

That's one reason a South Tampa homeowner got a contract in two weeks on her 1924 bungalow with sun room, fireplace, hardwood floors and original wavy-glass windows.

"It was just very charming, and those are the kinds of things that differentiate you from the masses," says Ed Gunning, the listing agent. "I could sell those all day long if I had them."

The seller, who bought the house in the '70s, had a huge amount of equity and was motivated to sell quickly because she had recently purchased a condo. She cut the agreed-upon sales price from an already-low $500,000 to $460,800 after an inspection showed the house needed structural repairs.

As for the buyers, they were thrilled.

"We had been loosely looking for a house and kind of felt like if we found a deal, we'd go for it," says Travis Bell, himself a real estate agent. "As soon as we walked in, we loved it because we love historic houses. There were several houses there that have been on the market close to a year because they are unrealistic in pricing. The owners have their head in the clouds."

Bell promptly put his own Hyde Park home up for sale and accepted an offer $7,000 below asking price. How long did it take him to get a contract?

Three days.

Tips for quick sales

- Price your house competitively. You want to be at the lower end of the price range of homes for sale in your area.

To get a general idea of correct pricing, go to your county property appraiser's Web site, type in your address and look at recent comparable sale prices for homes near yours. Also check the asking price for places currently on the market.

- Clean and de-clutter. Buyers have a hard time looking past dirt and overcrowded rooms. Remove as many personal items as possible, including wedding photos and the kids' drawings on the fridge.

- If you have time and money to repaint and/or recarpet, use light, neutral colors.

- If it's in need of repair, get it fixed. Leaks, cracks and broken items are signs of deferred maintenance that scare off buyers.

- Spruce up the curb appeal with some flowers and well-kept lawn and hedges.

[Last modified December 9, 2007, 01:13:42]