THINKING OF PUTTING YOUR HOUSE ON THE MARKET?

Bad Idea.

Unless you absolutely MUST sell your home now, don't even put it on the market. Here are my reasons:

1. Buyers are all looking for a steal. They can read the papers just like you and me and they see that median home prices are, on average, down 20% from 2006 peaks. And, in certain areas of the country, the decline is more like 30% or 40%.

2. Even if a buyer wants to buy at your price, he or she will have a tougher time getting financing than buyers in the first 7 years of this decade. There is liquidity in the system, that is not the issue. But, burned and chastened lenders are now looking harder at mortgage applications - actually requiring down payments, real income and decent credit scores. What's that about??

3. Some real estate agents will tell you that there is no harm to putting your house on the market at the price you want to sell for you might get lucky and find someone who just loves your house. "It only takes one," is the agents' come-on. And yes, it is possible that there is a buyer who will ignore the bad headlines and reach for your house. It is also possible that you will win the lottery. The problem is that once you put your house on the market, bad things happen:

a) You have to keep your house clean for showings (a showing can be nothing more than a bored agent and a long-shot buyer);

b) You are now in the system and agents and buyers will assume that there will be price declines coming; and starting down a path of price declines is a very slippery slope. Once you lower the price, you create the expectation of further declines.

c) Once you commit to a sale, your own time and energy are consumed by thoughts of sale. You are distracted ... your focus is dispersed.

So, what to do if your budget is stretched (like the rest of us) and you would be much better off if you could sell?

1. Delay making home repairs unless you have no choice.

2. Try to refinance your mortgage to lower the rate - don't expect more money, just see if you can lower your payments.

3. Consider challenging your tax assessment. The reality is likely that all values in your town have fallen but until your community raises it tax rate, you may be able to lower your taxes.

4. Consider doing certain 3d-party chores yourself. Can you or one of your freeloading kids cut the lawn like all us baby boomers did?

5. What about renting out a room?

6. Is there space in your house to set up a side business?

7. Change to energy efficient light bulbs and other products.

8. Turn down the thermostat in winter. How about a wood burning stove? Can you use less or no air-conditioning? Humans survived in very warm climates for thousands of years without air-conditioning.

9. Cut down on the duration of your showers or baths.... Flush the toilet every three visits (just kidding).

10. Speak or meet with your homeowners (insurance) agent - explore all ways to reduce your premium.

The next 12 - 24 months are going to be bumpy for all of us. For most of us, our homes are both our largest asset and in some ways, our largest liability. There is no easy way to sell your house today. If you can avoid it, do so. Try some or all of my suggestions for reducing your homeownership expenses.

Jim Randel is the author of The Skinny on the Housing Crisis (Clover Leaf 2008) and Confessions of a Real Estate Entrepreneur (McGraw Hill, 2008).

www.jimrandel.com