Inventory levels for homes in Moore County started building up in 2007, which sent values readjusting downward, so sellers have had to do a lot more to be competitive in such a buyer-driven market.

And the higher the list price of the residence, the greater the challenges.

“The smart sellers are the ones that have their home in pristine condition, and they have had a prelisting appraisal done,” said Bill Sahadi, owner of Fore Properties in Southern Pines. “Those homes tend to get higher offers relative to the asking price because it’s easier to defend the value. Too many sellers price their home based on wishful thinking.

“Smart sellers are being rewarded, and wishful thinkers are causing nightmares.”

Sahadi relies on Hamp Thomas, owner of Carolina Appraisers in Whispering Pines, to conduct an appraisal for clients before they list their house.

“Hamp is my most valuable marketing weapon right now,” Sahadi said. “A good broker is not afraid to tell a buyer that they can defend the value of the home.”

In the past two months, Fore Properties has closed five residential deals in which two were just below the asking price. One was right on the number, and two exceeded it, thanks to multiple offers.

“Our formula works,” Sahadi said. “It’s folly to think you can list a home above the appraised value and not disappoint your sellers with the final offer. Buyers look at appraised value as full retail, so they use that number as a benchmark to beat. Every-body wants a deal.”

Kay Beran, president of Prudential Gouger O’Neal and Saunders Real Estate, agrees that Realtors and sellers must “do a better job of setting expectations up front.”

“You can only negotiate on so many items until the deal falls apart,” Beran said. “Buyers can’t ask for everything and expect to get it all.”

She believes that a large part of the problem lies with appraisals that fall short of market value.

“The appraisals are sometimes dealing us a side blow that we can’t recover from because buyers are embracing many of the insignificant items in the appraisal,” Beran said. “We’ve also had two different appraisers look at the same home and come back with vastly different reports. It makes you wonder if they looked at the same house. So we’ve got our work cut out for us.”

Thomas said the appraisal business has “changed dramatically” because underwriting guidelines “have gotten so tough.”

“That’s the reason there have been so many short appraisals that have killed deals,” he said. “Underwriters want perfect comparables, usually within the past 90 days and within a mile radius. That may work in a metropolitan area, but not here in Moore County.”

Thomas also empathizes with Beran, because he has seen separate appraisals of the same house vary by as much as $50,000.

“How do you explain that to a buyer?” Thomas says.

Seller frustration, on the other hand, has prompted many to take their home off the market and rent it instead.

“The rental market has grown because of the atmosphere we’ve got,” Beran said.

Fortunately, the timing has been good because many military families are opting to rent instead of buy because they can’t sell their home at their former post, financing is more difficult to obtain, or they feel that re-selling will be difficult if they are reassigned within three years.

“The military is certainly part of our rental DNA now,” Beran said. “If they can’t buy, they do the next best thing and get a rental.”

Marcus Larose, co-owner of Weichert, Realtors-Larose & Co. in Southern Pines, says he started a property management division three years ago to create a new revenue stream in the face of lagging sales.

“It was good timing, because we’ve got over 160 long-term rental properties,” Larose said.

His wife, Cathy, adds that residential sales appear to be on the upswing.

“January was our best month ever, and we’ve been in business since February 2006,” she said. “I feel like the high-end buyers and investors are coming back. We haven’t seen them in years.”

John Whelan, owner of Whelan Realty in Seven Lakes, is also optimistic.

“Things are starting to pick up,” Whelan said. “But we’ve only closed on two houses for this year, which is behind schedule. It’s rough, and has been since 2007.”

Despite five years of depressed prices, Beran has never considered the Moore County market to be “dead.”

“I’m seeing signs that improvement is on the horizon,” she said “It’s nice for people to think there’s value here. We’re still a good choice for a lot of people.”

Contact Ted M. Natt Jr. at tnatt@thepilot.com.