This week in DC real estate ...

It's crazy out there:

• One realtor in my office reports: "My buyer client made an offer of $240K on a listing that had been reduced from $359K to $249K. Seller wouldn't budge."
• Another realtor says: "I have co-op listing in NW. A buyer made an offer late last week but withdrew it after reading the condo article in the Washington Post on Saturday."
• It seems to be a market in which negotiation is happening between buyers in sellers in very small increments. Buyers make an initial offer (below the sellers' asking price), which is inevitably viewed as a "low-ball" by the sellers who are initially outraged, then when their outrage cools --- namely because no other competing offers materialize --- they make a counter-offer a few thousand dollars below their list price. Buyers then counter a few thousand dollars above their original offer. This process can go on for days. Little bit by little bit, though, realtors and their clients are able to make these deals work. Just like the good ol' days.
• The best (read, "win-win") deals are struck when sellers agree to sit down face-to-face with the buyers' agents to craft deals that meet at least some of the needs and goals of both buyers and sellers. If sellers and buyers are prepared to give a little, these deals can be very smooth, if not always transcendent!
• That said, there's a ton of free-floating anxiety out there. Buyers are anxious about buying now (as opposed to waiting). Sellers are anxious about "losing" money by selling now (as opposed to six months ago). Realtors are working overtime to keep everyone calm.
• As I mentioned last week, pricing listings for sale is incredibly difficult right now, especially if sellers have not been kept abreast of what's been happening in the market over the last few months. The danger is that sellers will want to price their homes based on the "escalated" prices of homes sold six or eight months ago. Those prices were arrived at in the face of multiple offers and certainly don't reflect the reality of today's market. Today, multiple offers are RARE. As a result, sellers and their agents should be looking at the LISTING prices of those houses that sold six to eight months ago --- and not the ultimate sales prices. Many sellers, though, are behind the market-information curve. As a result, there are many homes that are sitting on the market ... sometimes for months.
• The fact that many sellers are currently valuing their homes move highly than prospective purchasers does not, however, prevent some realtors from taking these over-priced listings. Depending on the price point, location, or curb appeal of the listing, some agents will decide to take an over-priced listing in hopes of picking up other clients from the listing (from an open house, from a "sign call" or ad call, and from marketing the property to neighbors).
• DC sellers should be aware of new legislation relating to termite damage in their homes. Apparently (and I'm trying to get more information on this as I write this), new District legislation went into effect on January 1, 2006 that states that if, as a result of a termite inspection, evidence of "old" termite damage or previous termite infestation is discovered, the home MUST be treated for termites. In a city where many of our homes are a 100 years old, is there a chance that your house has had a termite infestation at some point in its past? You bet. If you're thinking about putting your home on the market in the near future, stay tuned for more information about this issue.