Sellers, it’s not your market anymore.

There is hope. The formula is ancient: product and price. Sellers, who really want to sell, need to lower prices till they generate activity such as phone calls and showings and keep lowering till they generate offers.

It is now officially a buyers’ market and this is true in all but a very few U.S. markets. In a buyers’ market, the good deals sell first. The formula that has been used successfully for getting showings and offers on a stagnant property is to: 1. Lower the price 5 percent at a time until the phone starts ringing — ACTIVITY. 2. Keep lowering the price 5 percent at a time until you get offers —ACTION.

How often? Every two weeks is not too often to lower the price, but timing is dependent on time of year and seller’s motivation. In the busiest season, when you have the most activity, every two weeks might not be fast enough. You will know you are close when the phone starts ringing. You’ll know you are really close when you get offers. You’ll know you are there when you have a signed contract.

A price you can count on

Pricing a house right is the most important part of the equation, but it can be hard to find that number in a changing market. It doesn’t help to know what a house sold for six months ago or even three months ago.

You have to look at what the contract prices recently have been, not at what the high-water mark was in 2005, because those prices are gone.

Some agents routinely advise clients to start at or about 5 percent below the last sale.

To get from contract to closing, be willing to negotiate. Fix anything the buyer needs to have fixed to have a safe home (termite treatment, upgrade electric, plumbing repairs, sound roof, and dead trees limbs down.) Remain calm.

In a seller’s market, sellers are insulted by offers lower than 5 percent off the asking price. In today’s market, you definitely will get offers lower than this. If you are insulted by any offers, you need attitude adjustment. Nobody cares if you are insulted.

There are buyers in our market right now and they want to buy. The hold up is price. Sellers are still in denial about the direction of the market — they can’t let go of the big number and they think any minute this market is going to turn around.

Each neighborhood is different. While some areas are still seeing prices “ticking up a little bit,” if a house isn’t getting any traffic, the price is too high.

If you’ve got 10 legitimate showings — with agents that are bringing clients and not just agents coming to look — and there are no offers, it may be time to lower your price.

Also, if a property sits two weeks with no interest, not even an agent dropping by, “it’s time to consider a lower price.

Unfortunately, this ship is too big and wieldy. And its run into an iceberg called Subprime Mortgages. It’s just not going to be able to bounce back. Last I looked in our MLS, there was an eleven month inventory on the market in western Ventura County with 2094 active listings … Usually, we have three to six months of inventory.

Reality is the only hope for a turnaround in this market. Inventory has to clear out. A lot of it will clear out via foreclosure. That’s a fact. If you are a seller who can still avoid foreclosure, take the money you can get and move on.

If you don’t want to waste time, go even lower than everyone else. A local Realtor had clients who had decided it was time to downsize, but they didn’t want to get caught in the stagnant market they saw building up around them in Ventura County.

So instead of listing their home at the price advertised for two other houses on their street, or at the price that similar homes had sold for earlier in the year, they listed for $15,000 below the competition. They got “a tremendous amount of traffic” and sold in two days, attracting multiple offers.

The $535,000 contract was $10,000 above the listing price, but the home-seller didn’t pocket the extra money. It went to help the buyers with closing costs.

Give a little, and more

If cutting the price doesn’t help, perhaps offering to give some of that money back to the buyer will work. Financial incentives come in many forms. There’s help with closing costs, whereby sellers agree to pay for buyers’ settlement expenses, including the taxes and insurance payments. Seller contributions can also be used to “buy down” or reduce lenders’ interest rates, or to pay bonuses to agents.

Today, the price has to make sense to the buyer. For sellers stuck in 2004’s market when seller’s ruled, today’s price will not make sense to you. It will be shocking. But for sellers who really want to sell, it’s time to bite the bullet. It’s time to realize it’s not your market anymore.

(Bob Caldwell is a real estate advisor with Troop Real Estate. He can be reached at 469-2432.)