By Steve McLinden • Bankrate.com

Dear Steve,
Our house has been on the market for nearly eight months. I have recently transferred jobs to another city and desperately need to sell because I am now paying two mortgages. Should we relent and turn to one of those “buy your house for cash” operations? How do these businesses operate and how much do they typically pay?
– Lonnie

Dear Lonnie,
Most of these companies are legitimate and basically play the role of a fast-acting, lowballing investor. The larger buyers have a good credit line and can close deals pretty quickly. But they usually pay less than smaller investors — sometimes much less.

Still, these businesses have a broadening spectrum of customers in today’s market. Sellers range from those trying to avoid foreclosure or who are selling off recently inherited property to those who are retiring, rightsizing, going through a divorce and those who are caught in less-than-desirable mortgage structures or who owe a multitude of back taxes. Or as in your case, they may be transferring jobs. Some sellers don’t want to go through the machinations of multiple repairs and welcome the convenience of a quick disposal.

The pluses are that such operations pay cash, move quickly and buy “as is.” Many will also pay most standard closing costs. The minuses are the deep discounts they command. Critics say they welcome unsavory elements in some neighborhoods when they convert homes to rentals. Proponents counter that they actually help prevent blight by ridding neighborhoods of poorly maintained homes.

What do they pay? That can vary widely. Most of them use software to analyze how much a home will cost to repair and how much to offer for it. Officials of such operations have told the media in the past that their aim is to buy at about 65 cents on the dollar, although in some particularly depressed markets that number has dropped to as low as 50 percent, particularly on condos. Some will merely try to gauge how much equity you have in a house and offer that and little more.

As you might expect, these are some of the lowest of the lowballers out there. The deep discounts, they say, allow them to renovate the place, pay for utility and maintenance costs while it’s under renovation and market the home once it’s ready to resell. When these homes are repaired, the firms or their franchisees typically resell the properties to new owners, other investors or add them to their rental portfolios.

These days, more and more of these “opportunity investors” are cropping up. The big and established ones such as the heavily capitalized HomeVestors focus mostly on starter homes and rental homes in the $100,000-and-under category, located in older neighborhoods. But as home values continue to drop and conventional sales slack, some have started picking up higher-dollar houses.

How does the process work? Representatives will come to your home, give it a thorough and free inspection, make their assessment, then make you an offer — usually within a few days. It will be limbo-low, of course, and they expect you to haggle. Be sure you make at least a couple of counteroffers if you are going this route. If their low offer doesn’t offend you, your return offer won’t offend them. But make sure you check with the Better Business Bureau before making any commitment. There are more and more scammers out there. Ideally, the company will belong to an organization such as The National Association of Responsible Home Rebuilders and Investors.

To employ an overused term, these companies “are what they are.” Most nondistressed sellers won’t bite at their offers, however. You may be better served finding a midpoint between their offer and your current asking price and re-listing the property with a different brokerage for that median price for no more than 60 days, then see if that scares up any new offers — if you have that much time, that is.

by Steve McLinden
Thursday, January 3, 2008provided by

Heading into 2008, the market just isn’t turning around as so many predicted. The industry, it seems, has been caught up in a game of “projecting,” to use a psycho-speak term. Meanwhile, this pesky subprime headache lingers on as we start to draw a clearer picture of how recklessly this shaky housing-market foundation was laid. It’s a hangover that will last well beyond New Year’s Day.

In contrast to the billions in risky ARM loans that were advanced to questionable borrowers toward the end of the boom years, many credit-worthy buyers are now getting a different kind of arm — a straight-arm — when they seek out mortgages amidst a backdrop of spiraling foreclosures and plummeting prices.

My blanket advice for would-be sellers: Stay put. Ride this out where you’re sitting if possible, because values will stabilize again. If current circumstances dictate otherwise, then you’ll have to ratchet up your marketing plan a notch to adjust to the times. As for buyers: Well, you’re “in your element” and the getting is good.

Here are eight strategies for buyers and sellers who want to make a housing move in ‘08:

8 strategies for savvy sellers

1. Understand what “market value” means.
2. Don’t be an as-is seller.
3. Hire a top performer.
4. Know your market’s nuances.
5. Use the Internet.
6. Use other people’s money.
7. Become a “lender.”
8. Simplify and neutralize.

1. Understand what “market value” means. It’s not what your friend sold his house for two years ago or even two months ago. It’s not the value your latest tax assessment was based on or what an appraiser said the house was worth a year ago. It is exactly what someone is willing to pay for your house today. Hence, price realistically and broaden incentives, such as closing costs and throw-ins like appliances, flat-screen televisions, etc. There is an old saying: “There’s nothing wrong with a home that the right price can’t fix.”

2. Don’t be an as-is seller. That is, unless you absolutely have to be one. Potential homebuyers aren’t looking for fixer-uppers in the current market unless they are rock-bottom, bargain-basement priced. Large volumes of foreclosed homes are already being sold in poor condition at auction.

3. Hire a top performer. These days, you need an agent who outshines the others and routinely posts better-than-average sales numbers year after year. Agencies may try to steer you toward less-seasoned agents, but if you’re paying the commission, then the hire should be your call. The best agents have an innate sense for that right price and right marketing plan. They can suggest the necessary repairs and tweaks while targeting your home to the right buying group. Caveat: In selecting an agent, the percentage of listings sold is generally a better performance barometer than a high volume of sales.

4. Know your market’s nuances. No two markets are exactly alike. Yes, most sellers are now swimming upstream. But there are always counter currents to consider. In many areas, modestly priced homes have bigger buying pools because tighter mortgage qualifications are keeping buyers out of more expensive homes. A little research and a savvy agent can give you an edge and an education.

5. Use the Internet. According to compete.com, total time spent online rose 24.3 percent from the fall of 2006 to the fall of 2007. Yes, people are still scoping out newspaper classified ads and real estate listing magazines, but more and more Americans have been wired to at least start their home shopping online.

6. Use other people’s money. You don’t have to sell for a big loss to get out from under your rising mortgage payments. If you can, rent out your home for a sum that covers your house payments, insurance, taxes and maintenance costs. Do try to roll in a slight buffer to cover unanticipated expenses. And realize you’ll need capital to refresh the place when the market stabilizes and you take off your landlord hat to prep the home for sale again. Or consider offering lease-to-own terms to your renter and you may not have to worry about the future sale.

7. Become a “lender.” Tough times call for unconventional measures. Consider carrying part of the buyer’s note with interest, secured by an asset belonging to the buyer. Do so only after a thorough credit check and only if you can afford to wait for the balance of the purchase price. This, by the way, is not a game for the faint of heart.

8. Simplify and neutralize. In this sales environment, you’ve probably already been told to focus on curb appeal, add fresh landscaping and de-clutter the house by removing family photos and heirlooms or other items you don’t need or use on a daily basis.

But let’s take it a step further. Paint your rooms neutral colors. Hire a redesign or home-staging firm to help you present your home in optimal condition and give potential buyers a chance to envision their possibilities there. And while you’re at it, get a pre-listing inspection, which will reveal any defects your home has and allow you time to make repairs. Then provide a copy of the report to buyers, attaching a list of the fixes you made.

Buyers are in an enviable position, with plenty of homes on the market, and sellers who are willing to bargain. Here are eight tips for buyers.

8 strategies for buyers in a flooded market

1. Negotiate, negotiate.
2. Think local.
3. Don’t bank on further market drops.
4. Keep resale potential in mind.
5. Look beyond cosmetics.
6. Consider off-peak sales seasons.
7. Use your buying leverage.
8. Ask for contingencies.

1. Negotiate, negotiate. There’s a glut of homes on the market — more than twice the average inventory in some markets. Yet there are fewer prospective buyers with whom to compete, and considerably more room for after-the-purchase value appreciation than a few years ago. Sellers are fixing up their places like never before in hopes one serious buyer will come along. Your chance to pick up a quality home for a big discount may never be better than the present. Keep those counter-offers coming. And let the seller pay all the commissions! Remember, virtually everything in a real estate transaction is negotiable.

2. Think local. I’ve said it before: All real estate is local. Employ the standard strategy of examining recent sales prices of local comparable, or “comp” houses. But take it a step further. Ask your agent for the original listing prices of comp houses and compare them to the actual sales prices. Many Internet sites also have this information. This data will give you the clearest picture of what sellers were willing to accept for their homes in your neighborhood and can help you determine just how low you can go on your offer.

3. Don’t bank on further market drops. If you have the means, pounce on that oh-so-sweet deal. This cycle appears to be at or near the bottom. You can’t confidently count on the market sinking any lower, even though it may.

4. Keep resale potential in mind. Sure, you always seek out properties with that at-home feel. But if you can find homey in or near a growing medical district, growing university or other vibrant employment center, your resale universe down the road will always be larger than the market average.

5. Look beyond cosmetics. A tired-looking house in a great area may be a much better bargain in the overall scheme of things than a sprightly, higher-priced home in the same area. Yet many of these slightly worn homes, lest they be on the foreclosure auction block, are getting roundly ignored. There are some diamonds in the rough out there now!

6. Consider off-peak sales seasons. Yeah, there’ll still be bargains aplenty come the prime spring and summer selling season and plenty of inventory to peruse. But fall and winter can be the time of especially acute seller discontent. Sellers may be more motivated to take your lowball offer then — especially if it’s the only one they get!

7. Use your buying leverage. Ask the seller’s agent when the seller bought the home, how much he paid for it, and why he’s selling. In a seller’s market, the seller would likely thumb his nose at you upon such a request. Now, they may give it a thumbs up instead.

8. Ask for contingencies. When you’ve agreed on a sales price, make your offer contingent on the home appraising at that sum, on passing the buyer’s inspection and on you obtaining financing. Work in as much legal wiggle-room as you can so you’ll be able to back out without risking your earnest money should things go sour or another opportunity arise.

By Jeff Opdyke
From The Wall Street Journal Online

Earlier this year, my wife, Amy, and I decided to remodel our master bathroom. The tub had broken in 2004, and wasn’t reparable. But instead of replacing the tub, we replaced the entire bathroom, which we never liked to begin with.

Out went the stark look with lots of brass and white faux marble; in came the warm Asian theme with lots of slate and bamboo and mood lighting. It’s a style, I originally wrote, not very common in my home state of Louisiana, and I wondered whether personal tastes should be tempered in a remodeling since it might affect

I won’t know the answer to that question for a long time, since our house isn’t up for sale. However, another question has emerged: Was the cost worth the end result?

Now, let me say that we love our new bath. It turned out even better than I envisioned when I designed it. I love my new shower with the trio of body jets. When the glassworker came to install the shower doors, he walked into the bathroom and within seconds said, “This might be the coolest bath I’ve ever been in.”

But…we overspent our budget by about 75%. A large part of that came in the fine print of our contract: the two sentences noting that “all material necessary for electrical, plumbing, tile and flooring” were excluded from the quote, and that the “total price may change due to the time and labor required for specific material.” I read that originally and had no worries. I was buying all the material myself.

However, I wasn’t thinking about supplies needed for the internal plumbing, or for laying a ton of slate. And I didn’t recognize the effort involved in laying so much tile in certain patterns, or the plumbing required for body jets and temperature-controlled faucets.

I was stunned by the final cost.

Amy thought that while the “end result is gorgeous, the cost was too high. Did we really need all those jets in the shower? And I would have gone with a simpler faucet system. There are ways to cut costs, but we made the decision to spend on what we did.”

By “we” she means me. I took control of this project, and Amy said little because I was so forceful in my vision. “I just went along with it,” she says. “If I had to do it all over again, though, I would not spend this much money.”

Neither would I, actually. So I see this experience as a lesson learned: When it comes to remodeling — and our kitchen is next — never equate your spouse’s silence with acceptance. Your passion about a project may overwhelm your partner into submission.

resale at some point.

By Jeff Opdyke
From The Wall Street Journal Online

In recent months my family’s life has started to burst at the seams. My 10-year-old son has two 90-minute soccer practices a week, multiple soccer games on weekends, and a lot more homework now that he’s in fifth grade. My 4-year-old daughter has started dance classes. My wife, Amy, is increasingly busy at work as an administrator for a new medical center that’s growing quickly. I’ve taken on a book project, I’m rewriting another author’s book, and Amy and I are now doing a weekly Love & Money video.

I’m not complaining, but rather offering the context to explain a decision Amy and I recently made after weeks of discussion: We’re selling our rental house.

We’ve owned the house a bit less than two years, but we now find we no longer have the time to properly manage the property, because changes in our daily life have made dealing with our side business all but impossible.

It’s a fate common to lots of families operating businesses alongside their primary careers. You reach a point where you realize that you can’t devote the necessary effort to your business. You then face a choice: Either your business falls apart — or your family life.

* * *

Amy and I bought our rental house in January 2006, a 1930s-era, two-bedroom bungalow in the oldest neighborhood in our hometown of Baton Rouge. We originally invested there because the area is gentrifying quickly.

We went into this affair with the expectation that we’d generate some nice income on the side, and slowly build some wealth over the years as the value of the property increased. And it was all playing out as expected. The monthly rental income exceeds our all-in costs by more than 40%, earning us more than $300 a month. The value of the house, meanwhile, has climbed decently in the time we’ve owned it.

Better still, we found the perfect renter. Never late with the payments, he maintained the house and yard, and the only issue he ever had was locking himself out one evening, requiring me to spend an hour driving there and back to let him in.

It was too good to last. And it hasn’t.

Our renter, who leased the house about three months after we bought it, sent Amy an email saying that his roommate was leaving. The renter could not afford the rent on his own, but loved the house and didn’t want to leave. So he offered to buy the house.

Initially, we weren’t inclined to sell. But then we started talking about finding a new renter. The last time, it took three months — requiring numerous trips to the house to meet prospects.

We barely had the time then; we definitely don’t have that time now. Our work schedules — combined with soccer and dance practices and homework — leave very little free time during the week. Our son is slated to play more than 20 soccer games between now and mid-November, so our weekends are booked.

I also ran some numbers in case we decided to hire a property-management company to handle all of this. I concluded that we’d actually generate greater income taking the accumulated equity from the sale and sticking it in an online savings account, although we’d miss out on some tax benefits and any further appreciation.

So the thought of replacing our renter caused us to rethink our knee-jerk rejection of his purchase offer.

Then a funny thing happened. As we started to talk about the possibility of selling the rental house, we realized that this was more than just a by-the-numbers discussion. It was easy to figure out what path made the most sense financially for the long term. At some point, though, the conversation shifted to what we want to do with our lives right now, and how that fit in with the decision about the rental property.

* * *

Specifically, Amy started talking about working part time. She wants to be more involved in our kids’ school, homework and extracurricular activities at a time when it would be beneficial to them. As it is now, she feels she’s giving short shrift to everything in her life, including her job.

We’ve been talking about hiring someone to pick up our kids from school (we aren’t on the route for the school bus), as well as hiring someone to help clean the house.

Amy hates the idea of doing either, even though she knows it would make our lives easier. These are things she’d like to do, if only she had the time. That’s why she’s thinking about cutting back her work hours.

And while I’m not keen on having relocated to Louisiana for her career only to have her want to now scale it back, I’m beginning to see that having her manage our daily obligations with the kids and house makes a lot of sense in terms of family tranquility — as well as my own ability to maximize our income.

Before embarking on that path, though, I told Amy I want financial security. While we have some emergency cash scattered about, the vast bulk of our assets are in real estate and retirement plans, none of which are liquid. I want liquidity — the knowledge that we have nonretirement-account money immediately available to draw on in the event of a financial emergency, such as the loss of a job. I told her I want to bank an amount of money equal to one year of my salary, in an account that we can easily draw on if anything ever happens to my job in particular.

I’ve done enough financial reporting in my life to know that the people who best survive the lean times are those who best prepare during the flush times. The equity from the rental house leaves us flush and will put us close to my mark. Then, we’ll direct into this account our monthly savings, putting us at or above our goal in nine months to a year, giving Amy the time she needs to determine how best to create the part-time position she wants in her chosen career.

It’s certainly not what we expected when we bought the rental property, but changing circumstances make you re-evaluate your situation. Closing the door on the rental house opened a new door to a possibility that can improve our life in ways beyond our pocketbook.

By Shelly Banjo
From The Wall Street Journal Online

The Web has helped home buyers find places to live for years, through real-estate agencies’ sites and classified listings. But now a number of sites have emerged that provide a raft of information beyond price, location and photos.

Among other things, these sites allow house hunters to screen prospective neighbors, evaluate school districts and see how members of the community rate a street’s Internet connectivity and cellphone service. Shoppers can keep abreast of the news in a neighborhood they’re considering, and get alerts when houses list for sale or restaurants open — or when a registered sex offender moves to the area. Consumers can find energy-efficient homes and compare locations by levels of toxic waste or drought conditions. And both buyers and sellers can join discussions with others who are in the market and real-estate professionals.

All of this information can be particularly helpful in turbulent real-estate markets like today’s, when many people would welcome greater assurance that they’re making the right decision.

Here’s a survey of what’s out there.

Comparison Shopping

“You can see just about any type of information about a house on Trulia.com,” says Matthew Orr, a Long Beach, N.Y., resident who used the site to find the home he and his fiancée are due to close on this month.

For starters, users can enter a city, town or ZIP Code and see a listing of every home for sale, sortable by price, address, number of bedrooms or bathrooms, broker or type of home (single-family or multi-family). They can also narrow the search by establishing parameters for location, size and property type. Mr. Orr says he and his fiancée used Trulia.com, which is owned by San Francisco-based Trulia Inc., to zero in on houses with big yards for their dogs, and he recommends the site’s home-comparison features.

Clicking on a listing brings up a page with a more-detailed description of the home, including how long it has been on the market, and photos. This page also offers lists of similar homes for sale and similar recently sold homes, with links to pages for each of those homes; charts comparing the home’s price to those of the similar homes and to the average listing and sale prices in the area; a sales history for the home, drawn from public records; and a link to a real-estate guide for the area that includes information on market trends, schools, crime statistics, income levels and commuting times.

There are also discussion boards, and users can arrange to have email alerts sent to them when properties within their search parameters are listed or sold. The site can also send alerts when the price of a particular house changes or the house is sold.

Similar features are available on the site owned by Seattle-based Zillow.com. Boulder, Colo., resident Melanie Fredericks says that when she and her husband were considering selling their house and buying a new home closer to their jobs, they used Zillow.com to “gather all the information before even heading to a real-estate agent, and decided to wait for a better time to sell.” One feature she found helpful was what the site calls Zestimates, which are Zillow.com’s estimates of the value of homes, including homes that aren’t listed for sale.

Another interesting feature of Zillow.com is that people whose homes aren’t on the market but who would consider selling at the right price can post a “Make Me Move” price to see if there’s any interest worth exploring.

Users of these and other real-estate sites should keep in mind that the data the sites use can sometimes be dated. For instance, information on the number of bedrooms and bathrooms may not reflect recent renovations. And the census figures the sites use for demographic profiles may be years old, so they may not reflect recent trends in rapidly changing neighborhoods or towns.

Someone’s Listening

One way to supplement the statistical information on real-estate sites and to get help with particular questions or concerns is to seek input from others in the market and from real-estate professionals on the sites’ discussion boards. Both Trulia and Zillow say these are their most popular features.

Lisa Suarez, an insurance broker from San Leandro, Calif., turned to a discussion board on Trulia.com recently after months of failing to find a buyer for her home.

Ms. Suarez posted a message on Trulia Voices at 2 a.m. asking if anyone had any suggestions on how to speed up the process of selling her home. Within minutes, she says, she was contacted by a real-estate agent who offered some advice that Ms. Suarez liked, and the two agreed to meet. Ms. Suarez hired the agent, Cindi Hagley of Windermere Real Estate Services Co. in San Ramon, Calif., and within three weeks had two offers for her house that she is considering. “In this devastating market, it means everything that you can reach someone out there that’s listening,” she says.

What the Neighbors Say

Other sites are designed to give users a look at neighborhoods through the eyes of the people who live there. On recently launched StreetAdvisor.com, based in Melbourne, Australia, buyers can look for input from residents of a particular street about their neighbors, local services and more.

For instance, potential buyers looking at a home on North Carlyn Ave. in Campbell, Calif., can read a review of life on the street written by Tom Huggett, who has lived there for 21 years. He notes that the first houses were built before World War II, and readers can practically feel the shade of the mature sycamores, redwoods, oaks and fruit trees he describes. The people range from infants to seniors, he says, and are “friendly but not nosey and helpful but not pushy.” And he notes that it’s only about three blocks to a “newly vibrant downtown” with a lot of bars, restaurants and shops.

Reviewers also rate their street for its overall “vibe,” which includes neighborly spirit and night life, among other factors; for its Internet and pay-TV access and cellphone reception; for its “health,” which includes factors like cleanliness, noise levels and traffic; for the cost of living and real-estate values; and for services and amenities like public transportation, medical facilities, schools, child care, and parks and recreation. Users can post pictures and videos as well.

One drawback of the site is that it hasn’t had the time to build up much content. Mr. Huggett is the only contributor from his street, for instance, and users will find no comments for many streets.

For a different take on neighborhood life, house hunters can check San Diego-based RottenNeighbor.com. This site lets users post complaints about their neighbors, so it can serve as a warning about frictions in a neighborhood. One recent user in Chicago wrote that the “guy on the top floor of this building plays his stereo all day and night. It’s so loud….He’s why I’m moving.”

Again, while such sites can be useful, there is a caveat. There is no way for sites that depend on user-generated content to verify the vast majority of information that people post, and of course such comments are largely, and often entirely, subjective.

Is It Green?

Several sites cater to house hunters’ concerns about energy efficiency and the environment. Walkscore.com, started by Seattle-based Front Seat Management LLC in July, rates the walkability of a neighborhood by the proximity of stores, restaurants, schools, parks, libraries and more to an address the user submits.

In the wake of a recent rash of brush fires, water shortages and other drought conditions around the country, Sperling’s Best Places of Portland, Ore., launched DroughtScore.com last month. By entering a ZIP Code, town or city, users can see a graph showing the past 13 months of drought levels in an area, based on statistics from the National Climatic Data Center.

For a broad view of the environmental conditions in a neighborhood, the best resource is the Environmental Protection Agency. At EPA.gov, house hunters can click on the “Where You Live” tab to learn about levels of air and water pollution, hazardous-waste sites and releases of toxic chemicals in a given city, county or ZIP Code.

At EnergyStar.gov, a joint site of the Environmental Protection Agency and the Department of Energy, users can find builders working with the EPA to build homes that meet the government’s Energy Star standards for energy efficiency. Another site, EcoBroker.com, owned by EcoBroker International, Evergreen, Colo., can also help users find homes with energy-efficient and environmentally friendly features.

Schools, Crime and News

Other sites specialize in information on school systems and crime statistics, areas that some real-estate agents aren’t inclined to talk about because of concerns that their comments could be construed as steering people away from or toward certain neighborhoods.

“I’m very careful as to what I tell buyers when they ask those questions,” says Toni L. Medjuck, owner of Beach to Bay Realty in Seminole, Fla. “I’d rather refer them to where they can find the information.”

For Sergey Krasnovsky and his wife, planning a move to Seattle meant using GreatSchools.net to narrow their search to two school districts for their 8-year-old son. Only then did they look for a potential home to buy. “The site lets you analyze each school not only based on [statistical ratings] but also on real feedback from parents,” Mr. Krasnovsky notes.

The site gives information for both public and private schools, including test scores, the ethnicity of students, student-teacher ratios and spending per pupil. In addition to written reviews, parents rate schools for principal leadership, teacher quality, extracurricular activities, parent involvement, and safety and discipline. The site is owned by GreatSchools Inc., a nonprofit organization based in San Francisco. Another site, SchoolMatters.com, a service of the Standard & Poor’s division of McGraw-Hill Cos., provides information on public schools only.

For crime statistics, Las Vegas-based AreaConnect LLC lets users compare data for more than 8,000 cities at www.AreaConnect.com/crime. Family Watchdog LLC, based in Indianapolis, provides the addresses and pictures of registered sex offenders at FamilyWatchdog.us. The site also will send email and cellphone alerts if a registered offender moves into a given neighborhood.

For a much broader scope, YourStreet.com, owned by San Francisco-based YourStreet Inc., lets users find recent news reports and commentary from blogs for any location in the U.S. The material includes crime reporting but also covers the full spectrum of community news. Users can also initiate or join discussions about local events. “We look at news as the foundation of what is really going on in a local community,” says James Nicholson, YourStreet’s CEO and founder.

– Ms. Banjo is a staff reporter for The Wall Street Journal in South Brunswick, N.J.

Email your comments to rjeditor@dowjones.com.

By Lauren Baier Kim

Here’s a look at what’s new in real-estate markets across the U.S. from around the Web. (Some links may require registration or subscriptions.)

Friday is a home seller’s lucky day

Want to up the chances of selling your home? Debut its listing on a Friday, reports the Seattle Post Intelligencer, which shares seven suggested selling tactics recently released by online real-estate brokerage Redfin.com. Faced with slower home sales this fall, the company had its computer scientists crunch the numbers on past real-estate sales. What’s so good about Friday? Homes that were initially listed on a Friday received 7.7% more traffic in their first week on the market than did homes that were first listed on the “worst” day, Thursday, the company says in its report, which is available on its site.

Two tactics suggested by Redfin especially resonate in today’s housing market: Don’t try to sell a vacant home and avoid selling when nearby foreclosed homes are available, the site says. Vacant homes are 9.5% more likely to sell at a reduced price and foreclosed properties are stiff competition for home sellers because “banks selling foreclosed properties are often eager to sell at any price,” Redfin says. Among the other strategies proposed by the site include: not setting your asking price too high — homes priced correctly from the start tend to sell at higher prices; price your home to fall within house hunters’ Web searches — homes that fall below or above common Web-search price cut-offs tend to see less online traffic from house hunters (e.g., a house priced at $355,000 may see less traffic than one priced at $350,000, Redfin says); be an active participant in your home’s sale — “stay engaged;” and list your house on Craigslist — the classified listings site drove additional traffic to listings on Redfin.

California city hardest hit by housing bust

Which U.S. city has been the worst affected by this year’s housing bust? Paramount, Calif., says the New York Times. In Paramount, home sales dropped 78% in the third quarter from the third quarter in 2006, from 134 home sales to only 30 last quarter, the Times says. Home prices in the city, located south of Los Angeles, rose last year to $500,000 for a “typical house” from $200,000 in 2003, the newspaper says. Many of the sales were driven by adjustable-rate mortgages with low initial payments, a type of home loan that is more difficult to get these days, the Times notes. Other areas of the country seeing big drops in home sales tend to be “moderate-income towns on the outskirts of major metropolitan areas, where adjustable-rate mortgages had become the norm,” the newspaper says. Many of these towns are located in California’s Inland Empire east of Los Angeles and in Florida, Arizona and Nevada, the Times says.

Builders get creative to sell

Home builders are using a variety of tactics to sell homes in the Chicago area, reports the Daily Herald. Glanville-Koshul Homes, which has four houses on the market in Wheaton and Glen Ellyn, Ill., all priced above $1 million, is offering to buy the homes of those who purchase its houses — on the condition that their homes are priced under $700,000, the Daily Herald says. Another company, Empeco Custom Builders, will fix up sellers’ homes at a price, but will refund that cost when a buyer closes on an Empeco-built house, the newspaper says. KLM Builders Inc. is offering a rent-to-buy plan for three already-built town houses in Antioch, Ill. — half of the rent will go toward a down payment, the Herald says. The newspaper notes that home builders are also offering discounts on already built homes — one builder has dropped $40,000 from the price for a four-bedroom home now listed at $412,275, while another says it will give a $30,000 price reduction to buyers who close on a single-family home before the end of the year.

Foreclosed homes can be tough to find

Sure, there are more foreclosed homes on the market these days — there are approximately 5,803 foreclosed homes on the market in California’s six Southland counties, says the Los Angeles Times. But try to find the listings for such properties, and you’re in for some work, the newspaper says. That’s because there isn’t one clearinghouse for such properties — listings for these homes can be found through the Multiple Listing Service and on Realtor.com, on bank lists, in tax records, on real-estate agents’ sites and on Web sites like Realtytrac.com and Foreclosures.com, which charges users a fee, the Times says. The newspaper suggests that the “easiest way” to find foreclosures is by working with real-estate agents who specialize in such listings. “They’ve done the research, saving buyers the trouble,” the Times says.

Falling home values produce tax cuts

Lowered property taxes are taking at least a little bit of the sting out of decreasing home values in California’s Santa Cruz County, reports Kurtis Alexander of the Santa Cruz Sentinel. As a result of the housing slump, Santa Cruz County assessors have been reappraising property values, and in some instances, reducing homeowners’ tax load, Mr. Alexander says. Most affected by the tax rollbacks are sections of the county in which new homes were built within the last two years, he says. For example, Mr. Alexander highlights the case of one area resident who purchased his two-bedroom, two-bath condo for $575,000 at the beginning of 2006 and will now save at least $300 a year in taxes because of the drop in his home’s value, Mr. Alexander reports. However, while the downturn in the market is producing some tax cuts for area residents, it’s also expected to result in millions of lost revenue for local cities, with Watsonville — whose growth in property tax revenues was 16% the past fiscal year but may be reduced to 5% or less this year — to be the most affected, he says. “We know we’re entering into leaner times but no one knows the magnitude yet,” he quotes the city’s manager as saying.

Ms. Kim is a senior editor at RealEstateJournal.com.

By Lauren Baier Kim

Here’s a look at what’s new in real-estate markets across the U.S. from around the Web. (Some links may require registration or subscriptions.)

 Resolve to buy in 2008

 Demand for U.S. residential real estate isn’t dead, it’s just stalled, writes Thomas Kostigen of Marketwatch. He notes that sales of luxury homes have been strong and that “with the value of the U.S. dollar low and real estate prices dropping, it isn’t hard to imagine foreigners taking bigger positions in properties here as part of their overall portfolios.” Prices and sale volumes are already down 25% in some areas of South Florida, and when overseas buyers see values dropping 50%, they are likely to buy, he says.

“At the first blush of renewed energy, the real estate market will bounce back,” he says.

Real-estate strategies for the new year

Steve McLinden of Bankrate.com agrees that home values will “stabilize again,” but it will be a rocky ride until they do — especially for home sellers, he says. He advises that they stay put and “ride this out,” he suggests. For sellers whose circumstances demand that they sell in today’s soft market, he offers several tips, including:

For buyers, he recommends not waiting to pounce on good deals, as the housing market may be “at or near bottom,” and using the glut of homes on the market and sellers’ anxiousness to sell to bargain more effectively. Make your purchase contract contingent on the home passing inspection, obtaining buyer financing, etc., he says.  Do your research on the local market, noting asking and selling prices, and don’t overlook “diamonds in the rough” — residences that aren’t cosmetically attractive, but have good bones, he says. He also suggests factoring in a house’s potential resale value before making a purchase.

Seniors sent to work to pay taxes

Greenburgh, N.Y., located in the state’s Westchester County, is considering a program that will allow seniors to literally work off their property taxes, according to an Associated Press article published in the New York state government’s Legislative Gazette. Through the program, the town would employ 25 seniors for $7 an hour in a variety of jobs, and allow them to work off about $500 a year from any outstanding property-tax debt.

The plan has its supporters, but the relief may not go far enough — Greenburgh has the third-highest property taxes in the U.S., the AP says. For instance, one senior interviewed in the article who has already taken out a reverse mortgage to help cover her expenses, says that she pays $12,000 in property taxes a year.

Similar programs are already in place in areas like Colorado, Massachusetts and South Carolina, the article says, with seniors in Boulder County, Colo., doing landscaping work and staffing the courthouse’s information booth to help pay their bills.

New real-estate niche heats up

In the midst of the housing slump, one segment of residential real estate is hot — “real estate owned” homes, known as “REOs,” says the Washington Post. These are foreclosed homes that banks failed to auction off at the courthouse.

Real-estate agents, title lawyers, cleaning specialists and information technology firms looking to profit from the surge in foreclosures are all getting into the field, the Post says. While some REO agents — who earn a commission for each home they sell — are having luck, the niche isn’t for everyone. The Post notes that such agents have high operating costs, having to pay for homes’ heating, electrical, cleaning and maintenance costs. For instance, one husband and wife team in Maryland who specialize in REOs typically pays $5,500 a month for homes’ gas and electric bills, the Post says.

Ms. Kim is a senior editor at RealEstateJournal.com.

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