New Rules

This Wall Street Journal article describes some of the "new rules of real estate" now that the markets are trending down. I think Marin buyers and sellers could benefit by learning the rules of the new reality as of now, the inflection point of this housing bubble:

1. Price your house in the bottom 25% of comparable properties.
2. If you are looking to enter the market for the first time, don't overly stretch your finances because rising house prices will no longer bail you out; first-time buyers need to leave a financial cushion instead of stretching as much as possible and counting on rising house prices.
3. New employees who are relocating to the area should steer clear of older construction where competition from newer construction could make reselling difficult.
4. Say goodbye to the days when you could simply look at what your neighbor’s house sold for and then list yours for 10% more.
5. Sellers need to make sure their house comes across as a good value relative to other houses on the market.
6. Cut your asking price by 3% to 5% if your listing doesn't generate several showings or written offers within three weeks. Repeat until sold.
   
7. Sellers need to help with closing costs.
8. For employers: enforce policies that require transferees to price their houses close to the appraised value. Enforce ‘loss on sale’ programs, which compensate people who are relocating for losses when they sell below the purchase price.

I would add:

9. Only use agents who are willing to reduce their commissions down to 1% or 2%.