Winning home pricing game takes strategy, motivation, timing

Although median home prices in Southern Nevada are near record highs, it is a buyers' market where recorded sales have slumped and for sale signs have increased, placing a high importance on effectively pricing a home for sale.

"It is very hard to paint the whole city in one brushstroke because prices vary from area to area," Fafie Moore of Realty Executives of Nevada said. "Home prices are not necessarily going down. There may be some areas (in Southern Nevada) where they have gone down 10 percent in the last year, but there are other neighborhoods where they have increased. Some areas have just stayed flat because in a lot of situations the sellers don't have to move and they don't want to sell at a loss."

According to the Greater Las Vegas Association of Realtors (GLVAR), in February:

--The median sales price of a single-family, detached house was $310,000, an increase from $302,000 in January and slightly below the all-time high median price of $315,000 in June 2006.

--There were 9,639 detached homes listed for sale on the Multiple Listing Service, a 4.6 percent increase from the month prior, but lower than the all-time high of 23,474 in October 2006.

--There were 1,407 houses sold, compared to 1,397 in January.

--Nearly 48 percent of all single-family homes sold within 60 days.

Moore said home shoppers are cautious.

"The bigger issue is that there are buyers out there who are serious buyers, but what they are looking for are serious sellers. We still have people moving into town that are relocating and looking for homes," Moore said.

Determining home prices

Realtors use several criteria when recommending a home's listing price, the most common is a comparative market analysis or CMA.

"What we try to do in the market that we are in today is look back at two to three months at the most, if possible, to find sales of properties similar to the subject property," said Devin Reiss, GLVAR's 2007 president and owner of Realty 500 Reiss Corp.

"Simply, we look at things such as square footage; the age (of the home); and the area, preferably in the same subdivision or the same proximity. And then we will make any adjustments based on any extra features that the subject property has, or what others may have such as a pool, spa, patio, the type of flooring, type of countertops, lot size."

The listing prices of comparable unsold homes, and the seller's mortgage balance and personal situation are also considered, said Karla Jarrett of Realty ONE Group.

"If other homes are staying on the market for a long time, I suggest that a client price lower than what others are listing their houses. A lot of people are not able to do that (list at a lower price) because they are over-encumbered on their homes and they owe too much. (In this situation and) if they are able, they may have to pay to get out of the mortgage or hold on until the market changes," Jarrett said. "Some people cannot wait because they have to move or because of financial difficulties they have to sell their home. I've had a few people who have had to take a loss to get out of their home."

"Another thing is to offer incentives just like the builders, like offering to help with closing costs or a higher co-op to bring buyers' agents in," Jarrett said, adding that some sellers may offer a lease option or to carry a second mortgage to generate interest. "Sellers should expect that their asking price be negotiable."

Spotting sellers' motivations

Pricing goes beyond a CMA and mortgages owed -- it reflects a seller's motives.

According to Larry Arman of Arman Realty, who recently partnered with Ron Laino of RE/MAX Associates to form The Bond Group, there are three types of sellers.

"There are three types of sellers: You have to sell your home because you are on a short stick; you are selling it to see how much you can sell it for; or you are a realistic seller," Arman said. "Are you trying to get top dollar and willing to wait until eternity, or do you have to sell your home?"

As foreclosures continue to hit the market, Arman said competition will rise and serious sellers may need to lower asking prices.

"Whatever the price they determine, sellers have to be prepared to reduce it every 30 days in order to sell it. I think that makes a lot of sense to the seller. If they are not prepared to do that, they will sit with their home a long time because there is too much competition," Arman said.

Laino said some homeowners may want to rethink their decision to sell.

"With the current market conditions and trends, there is a thought that if the person is not serious about selling their home that they shouldn't have their home on the market," Laino said. "Greed can no longer be a motivating factor in selling your home."

If a quick sell is the goal, Moore said a lower price point should be chosen.

"Everything sells, it is just a matter of price and time. The more motivated the sellers are and the more aggressive they are, the quicker their home will sell. If a home is overpriced, it will never sell. It is really a matter of being aggressive on your pricing and monitoring the number of buyers coming through," Moore said.

Timing impacts strategy

Steve Bottfeld of Marketing Solutions said sellers are reluctant to lower their asking prices because of housing reports.

"We had a real-estate boom in the existing-home market in 2004, and we had an echo boom in the new-home market 2005.

As we got into 2006, the sales in both markets (resale and new homes) slid, but the interesting thing is that the prices continued to rise," Bottfeld said. "People won't sell their home for less than it is worth. ... Sellers know the cost of new homes and they know that the land prices are going up. And they think 'I am not going to lower my price, period.' ... By and large, if you choose a correct price and stage the home properly, you will sell it."