Seller markets creep up on you. They don’t just suddenly happen from one month to another. As a local economy strengthens, jobs are created bringing in workers, which creates a demand for more homes. As one builder told me, “Homes are where the jobs go at night.”

Buyer markets on the other hand, can materialize suddenly, like a really bad cold in the morning or the obnoxious brother-in-law at your front door. All it can take is a couple of stories in the local media about some sort of slow down or a possible factory closing and suddenly, buyers don’t want to buy anymore. As the economy slows, people lose jobs and start moving elsewhere. With no one moving into town, those houses can sit on the market a long time.

This economic climate creates a glut of homes, which means you’ve moved into a buyers market. Buyers are in control and get prices lowered, lots of seller subsidies and even some extra perks and cash.

The hardest part about a buyer’s market is the education of the seller.

Sellers are slow to move from one market to the other, willing now to drop the prices by $5,000, $10,000 or even $25,000 to bring the price in line with what the market demands.

They can only remember what it was like when they bought the house a few year’s earlier – it was a seller’s market, they had to bid up by 5 or 10 percent and had to put down a lot of money, give away their first born and make a blood-pact with the loan officer.

They just can’t fathom the fact that now the buyers will get to come in, bid 5 to 10 percent below their asking price, ask for the seller’s second born and one of the cars in their driveway.

Here are some strategies that are not as severe, but will work in a market that is becoming competitive from the seller’s perspective.

First – drop your price. That’s it. Pretty simple, but it works. The buyer doesn’t care how much you paid for the house eight years ago, how much work you put into the place and that you put a three-tiered deck on the back. If you’re overpriced, they’ll buy someone else’s house. So, if your home isn’t moving, check the price first.

If you are bent on keeping your price, then sell the deal instead of the house. Take the initiative to place an offer on the table before any buyers even come into the house. Ask your agent to advertise this deal in the MLS or in the advertising: “Move in and make no payments for three months.”

Here’s how it works. If you’re trying to sell for $195,000 and your agent is after you to drop the price, instead of dropping $5,000, figure how many payments $5,000 would make and offer that as an incentive instead. In this case, if the buyer puts down 10 percent, the $5,000 would make four principal and interest payments on a $175,500 mortgage (30-year fixed with a 7 percent mortgage). Plenty of buyers would love to move into your house and live “free” for four months. The catch is – your offer is only good on a full price contract.

Instead of just dropping the price, sellers could offer other incentives, such as vacations, home warranties, vehicles – even boats.

Some loan programs allow the seller to pay off buyer’s bills. The biggest key in all of this is to not wait for a buyer to show up and then offer it. Make the offer early and often to attract the buyers.

In essence, you’re not selling the house as much as you’re selling the deal. In a buyer’s market, the question is not if the buyer can find a house, but which house offers the best value for the money.

Published: April 26, 2002

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Mr. Carr is an award-winning real estate broker in Northern Virginia and authored "Real Estate Investing Made Simple: a commonsense approach to building wealth." He also contributed to Donald Trump’s book, "The Best Real Estate Advice I Ever Received," and is an active trainer and coach of top producers in the Washington DC market. As a sought-after expert on real estate, Mr. Carr has been featured on CNN, various broadcast outlets and was the former real estate editor for The Washington Times. He accepts questions at his blog www.RealEstateOlogy.org.