To sell your home, the price must be right

NEW YORK -- The good news for sellers: Your house will sell. The bad? Only if the price is just right.

That could mean biting down hard and slashing tens of thousands from your ideal listing price if you're serious about selling. And you should be prepared to get even less than that.

The recently expired tax credits for home buyers gave sellers a boost. Home sales surged and values edged up. But since the deadline passed at the end of April, housing has faltered. Job insecurity, tight credit and consumer confidence are undermining a sustained recovery.

In June, sales of previously occupied homes fell 5.1 percent, while new home sales posted the second-weakest month on record. And many economists expect prices to decline another 2 percent to 10 percent followed by "a long, flat bottom," said Stan Humphries, chief economist at real estate website Zillow.com.

That means sellers must set their price with precision or risk languishing on the market.

Here's the disconnect facing sellers: The vast majority of sellers believe their homes are worth more than what their real estate agent recommends, according to HomeGain.com. At the same time, most buyers think for-sale homes are overpriced.

Analyze your market first. Determine how many houses similar to yours are up for sale. The more homes there are, the more it becomes necessary to list at the lower end.

"I want buyers to ask, why is this house priced so competitively," said Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."

Foreclosures and short sales, where the owner sells for less than what's owned on the property, complicate matters. Be honest. Are the foreclosures or short sales in your market a reasonable alternative a buyer would consider? Some won't be because they are in disrepair. But others, especially short sales, are often in good condition and can be priced 15 percent to 25 percent below a comparable home.

So you've got the right price, or a price low enough to attract bids. Don't be disappointed when an offer comes in below the listing price. And don't send back a token counteroffer that's only a few thousand dollars below what you want.