By Dan Rafter
Special to The Washington Post
Saturday, August 12, 2006; F01

In a perfect world, Dianne McDermott and her clients would never disagree.

Unfortunately, McDermott, a real estate agent with Re/Max Advantage Realty in Howard County, doesn't work in that perfect world. In real life, she and her clients occasionally struggle to compromise on some of the most important decisions involved in selling homes.

One of the most common causes for disagreement? Setting a sale price.

This shouldn't be surprising. Many home sellers remember last year, when the local real estate market was red hot. Houses sold in days, attracting multiple offers. Sellers could pick and choose the best.

That's no longer the case. The Washington area market, like much of the rest of the country, has shifted. Those multiple offers? They're long gone. The days of selling a home for higher than list price? Gone, too.

Problem is, many sellers have yet to accept this new reality, according to agents.

"The market changed quite suddenly," McDermott said. "It happened so much faster than it did in the early 1990s, the last time the market had a slowdown. Back then, it was more of a gradual thing. This change happened all of a sudden. Everyone knew it was going to happen, but no one knew exactly when."

The change means that agents are more frequently finding themselves at odds with sellers who still want top dollar for their homes. It also means that agents have to be more creative to keep their clients happy.

Sellers and their agents are supposed to function as a team, working together to get the best price, in the shortest time possible, for a home.

This happens, however, only after agents and their seller clients agree on what can seem like an unending string of questions: For how much should the seller list the home? When should the home be open for showings? What improvements need to be made before the home hits the market? How flexible is that asking price?

It's unrealistic to expect that sellers and their agents will always agree. But what if compromises are hard to come by? How can agents and sellers come to terms?

If they don't, the home-selling process, already challenging, can turn nightmarish. The best agents, and the most successful of sellers, find a way to turn disagreements into, at least, compromises that everyone can tolerate.

"Right now, price is the biggest source of disagreements I have with sellers," said Robyn Porter, an agent with the Bethesda office of Long & Foster Real Estate Inc. "We are still seeing a lot of sellers wanting to price their homes in a way that is more reflective of the growth of last summer. Now I really have to show them what other homes are selling for. They need to see that evidence so that they can settle on a more realistic price."

Armed with evidence, Porter doesn't hesitate when asked why homes sometimes sit on the market too long: It's all about price.

"If you have a great house in a great location but it's still on the market, it's most likely priced too high," she said. "If a house is priced well, it can still see multiple offers, even in this market."

It's trying to get to that proper price that trips people up.

And even when agents come to listing presentations with scores of comparables -- statements showing what similar homes have recently sold for -- some sellers just won't be convinced, the agents say.

Take McDermott. Earlier this year, she worked with a client trying to sell a house in Silver Spring. The client wanted to list the house at a higher price than McDermott advised. No matter how much evidence McDermott presented, the client wouldn't budge.

McDermott relented. The house sat on the market for six months, with the seller turning down offers he considered too low. Eventually, the seller gave up and told McDermott he would accept lower offers. McDermott called the agent of one of the prospective buyers who had made an offer the seller had rejected. The buyer made the exact same offer. This time, the seller accepted.

The difference? The seller listed his house for $1.8 million and wouldn't budge from that figure for half a year. Finally, the seller agreed to sell the house for $1.65 million.

"Sometimes you just have to be patient. In this case, the seller is finally accepting what is happening," McDermott said. "I guess they were in denial, like a lot of sellers today are. They don't want to hear about how the market is slowing down. They refuse to believe that the market could change so much in just one year. But it has."

That reluctance can hurt a seller. In this case, the seller could have sold his home for $1.65 million four months earlier than he did. With a mortgage of nearly $8,000 a month, the seller could have saved more than $30,000 if he had accepted the offer the first time.

That's why it's so important to reach a compromise, especially when it comes to setting a sales price, agents say.

"You need to make sure the seller is on board, that you're working as a team for the same goal," said Eric Peek, a real estate agent with the Chevy Chase office of Re/Max Realty Services. "Some sellers seem to think that Realtors have devious motives to price homes low and sell them quickly. The reality is, if you overprice a home, you are really costing yourself money."

That's why Peek prefers to offer a compromise to sellers who insist on a price that he thinks is too high. He will offer to list the home at the inflated price for a specific period of time, say two weeks to a month. If the house fetches good offers at that price, that's great. But if it doesn't bring any? Then Peek drops the price to what he originally thought was appropriate.

If a seller doesn't agree to this, Peek may make the hard decision to walk away from the listing.

Rob Bergman, an agent with the Georgetown office of Re/Max Allegiance, knows firsthand how steadfast sellers can be when it comes to pricing their homes. Earlier this year, a seller wouldn't compromise on the price of his Victorian house, refusing to list it for anything less than what he thought a four-bedroom house should nab.

Problem was, the four bedrooms in this Victorian on the north end of Capitol Hill were not typical: On both sides of the upper floor, residents had to walk through one bedroom to get to the one immediately adjacent to it. Bergman tried to explain to the seller that this quirky feature would knock the house's price slightly below what the standard four-bedroom Capitol Hill house would earn.

The seller, though, wouldn't listen, according to Bergman. Three months and no good offers later, the seller admitted to Bergman that he indeed had overpriced the house. Bergman lowered it to what he thought reasonable. Two offers came in immediately.

The seller, though, lost out. His home not only sat on the market three months longer than it should have, but it also brought in even less than what he could have moved it for had he priced it according to Bergman's original wishes. The reason? The market had slowed even more in the three months the house was on the market.

Bergman says he did his part: He told his client beforehand that all this would happen. The client, though, didn't listen.

And that's a lesson to all sellers today. This might be the time to lower expectations and listen when an agent offers pricing advice.

"He told me that he was wrong, but that he just had to try it," Bergman said. "It cost him $30,000 plus three months on the market. That's an expensive lesson."

Price may be the biggest issue upon which sellers and their agents disagree, but there are two other, smaller matters that can also drive the occasional stake in the relationship.

There's what agents see as reluctance among some sellers to put in the work necessary to make their house look its best. In today's market, homes need to be in their absolute best shape, agents say. Owners who resist painting dingy walls, removing all those extra pieces of furniture and fixing broken light switches run the risk of scaring off potential offers.

"They used to be able to just roll the houses out and not have to do anything to them, but those days are gone," Bergman said. "Most people now realize that they have to present the home at its best to get top dollar."

Again, sellers would do well to expend the necessary elbow grease before listing their homes.

Porter, from Long & Foster, last summer worked with homeowners in Montgomery County who resisted even minor cleaning and repair work. The home, though, sold in just three weeks.

That's good news, right? Not necessarily. To move the house in its less-than-pristine condition, the homeowners priced it significantly lower than they could have had it been in better condition.

The homeowners were able to sell the house, but they had to sacrifice profit to do so.

Then there's the issue of showing times. Selling a house is stressful, and having potential buyers tromping through at all hours of the day, and early evening, can make even the calmest of sellers a little crazy.

Some sellers seek to reduce this stress by limiting the times showings can be held.

This is okay if the limitations are reasonable and relatively minor. But an owner who cuts out significant chunks of prime showing time may be asking for trouble: That owner, after all, may be steering potential buyers onto the next house on the list, one that the buyers may bid for instead.

Agents say they explain this to skittish sellers. Again, some don't listen and suffer the consequences.

"The first week is the most important time for a house on the market," Bergman said. "You need as many showings as possible. Making it as easy to show as possible is best."