In September, the number of existing home sales fell a whopping 14.2% compared with the same period last year, according to the National Association of Realtors (NAR). In the third quarter of 2006, the median single-family-home price fell 1.24% on a year-on-year basis, marking the first average quarterly home-price decline since 1989. There are currently 3.75 million homes for sale in the U.S., nearly a million more than buyers had to choose from at the same time last year.
That's all good news for home buyers, who for the first time in years can afford to be picky about the home they choose and finicky about the price. But what about sellers? "If you don't have to sell right now, don't do it," says NAR spokesman Walter Molony. "But if you need to be in the market, be realistic about the competition. Buyers are certainly aware of it."
Adding insult to injury are economists' predictions that real-estate prices will continue to fall. "We're anticipating that the market will bottom out toward the end of next year," says Celia Chen, director of housing economics at Economy.com. A housing report recently issued by Economy.com predicts a 3.6% average nationwide drop in 2007. "It will get a little bit worse before it recovers," Chen predicts.
That means one thing: If you're determined to sell now, you have to act fast. Here are five creative strategies to move your property before the competition does.
1. Tempt the buyer or the buyer's broker
Forget about bidding wars. If they want their property to move these days, sellers have to offer incentives to the buyers and even their brokers, says Anthony Margueas, a realtor with Amalfi Estates in Pacific Palisades, Calif.
Granted, offering the buyer's broker money doesn't sound fair if you're a buyer. An agent certainly has more reason to show properties that offer the best incentives, foregoing those that don't. "As a buyer, make sure your agent isn't getting a bonus to get you to see a house," Margueas notes. But from a seller's perspective, it's a powerful incentive for brokers to bring in as many potential buyers as possible.
Jeremy Lichtenstein, a realtor with RE/MAX Realty Service in Maryland, has seen perks range from a two-year lease on a Mercedes (for the buyer) to a $5,000 gift card to an all-paid trip to Hawaii (for the buyer's agent). His advice: For the strategy to work, set a deadline. "Offer that trip to Hawaii if the contract is out by Nov. 30," he says.
George Nash, district manager of First Horizon Home Loans in Bethesda, Md., says buyers' incentives are getting more creative, as well. Generally, the seller is allowed to contribute up to 6% of the home's price on behalf of the buyer, which can add up to thousands of dollars. (The restriction doesn't apply to incentives offered to the buyer's broker.)
The common incentives take one of two forms, Nash says: The seller offers to pay down the buyer's closing costs, or to buy down points on their mortgage. Buying down points lowers their interest rate and, as a result, their monthly payment. Paying closing costs, on the other hand, is a welcome incentive for first-time buyers who have good incomes but not much in the way of savings.
Some sellers go as far as offering an "interest abatement," which is basically paying the buyer's mortgage interest for the first six months. "That's about 80% of the overall payment," Nash says. This incentive is particularly helpful for existing homeowners who often have to carry two mortgages at a time.
2. Stage your house
As much as you love your flower-patterned couch and your children's portraits on the mantelpiece, chances are they'll put off 
potential buyers. "We want people to go in [the house] and picture themselves living there," Lichtenstein says. This means "staging" the property with nice furniture — typically rented from a local boutique furniture store — and getting rid of trinkets and family pictures.
Think of it as selling new construction, where developers have a model house or apartment that is shown to potential buyers, Lichtenstein explains. Granted, it doesn't come cheap: Renting furniture costs him between $3,000 and $4,000 a month. But so far, results for Lichtenstein have come quick. A property he had sitting on the market for four months sold within 10 days after his firm gave it a borrowed face lift.
3. Throw a party
With that many homes on the market, how do you make yours stand out? Wendy Sarasohn, a realtor with the Corcoran Group in New York, finds nothing attracts a good crowd like a well-planned party. "I find an excuse to have an event at the space that I'm selling," she says. "It just injects new energy and focus on the property."
When she recently took over a high-end New York apartment that had been sitting on the market for months, Sarasohn decided to play with the idea that the space needed some renovation work: One of the special guests she invited to the party was a well-known plastic surgeon who could talk to the attendees about face lifts and other "renovation" procedures. At another property — a Park Avenue apartment — Sarasohn invited writer Michael Gross, who read chapters of his bestselling book "740 Park." And with another New York brownstone that was in such a dire state that her assistant fell through the floor, Sarasohn simply put out a hot chocolate stand. "Neighborhood people walked by and noticed the building for the first time, she says. "The kids wanted hot chocolate, the parents wandered in. And we sold the house."
4. Do your homework
Just got an offer? Better act fast. With all his properties, Margueas prepares in advance all reports and paperwork — the termite report, for example, title insurance, the physical inspection. "That way, the minute we get an offer we give all those reports to the buyer and the buyer's agent and they can review them within a few days," he says. "That's when they're most excited about the property." The longer it takes to receive these documents, the more likely it is that the buyer sees another property they like or get buyer's remorse, Margueas says.
5. Rent it out
Worse comes to worst, consider renting out your home while the market recovers. (Being a landlord, of course, isn't easy and comes with a slew of legal responsibilities and tax implications. For more on this, read our story.)
Margueas notes he is seeing an increase in the so-called "lease options to buy" deals, a form of renting in which the owner sets away a portion of each month's rent toward a down payment. The renter, on the other hand, agrees to buy the house at a predetermined later date, usually for a predetermined price. You get to keep the money set away for a down payment in the event that the renter doesn't qualify for a mortgage when the time comes to buy, or chooses to forgo the option to buy for any other reason. This may get complicated, so it's best discussed with a real-estate lawyer.
