If you plan to sell your home in 2006, now is the time to get busy.

This year is proving to be a far more difficult year than was record-setting 2005. Most communities are now in a "buyer's market," with more homes listed for sale than there are qualified buyers actively in the marketplace.

The nationwide volume of home sales is down slightly, but median prices are holding steady, according to recent reports from the National Association of Realtors.

Selling in 2006

There is still plenty of time to sell your home this year. But careful planning is required.

The first step is to be a "motivated seller" who really wants to sell. With a glut of homes now listed for sale in most price ranges, this is not a good time to "test the market." If you are not a serious home seller who will be realistic about your home's asking price, don't waste your time in today's difficult market.

The second step is to get your house or condo into near-model home condition. Look at it critically, through a potential buyer's eyes. Most homes need interior and exterior fresh paint (the most profitable improvement you can make), repairing and cleaning. Pay special attention to sprucing up the kitchen and bathrooms.

The third and very crucial step is to interview at least three successful realty agents who sell homes like yours in your area. Even if you think you can sell your home alone without professional help (called a "for sale by owner" or fizz-bo), the agents you interview won't mind. They know most do-it-yourself sellers fail and within 30 to 60 days list their homes for sale with one of the agents already interviewed.

Key questions to ask

After your home is in its best near-model-home condition, it's time to interview at least three agents who successfully sell homes like yours to compare their pros and cons. Each invited agent should give you his/her 30-minute listing presentation. Here are the key questions to ask if each agent didn't already answer them:

• How much can you get for my home? Please notice the question is not "How much do you think my home is worth?" Today's home sales market is extremely competitive so you want each agent's opinion of how much they can get for your home.

Each agent should justify his/her answer by giving you a written CMA (comparative market analysis). This CMA form (usually a booklet prepared on the agent's computer) shows (a) recent sales prices of comparable nearby homes, (b) current asking prices of neighborhood homes like yours listed for sale (your competition), and (c) asking prices of recently expired comparable listings, which didn't sell (usually because they were overpriced).

After interviewing three (or more) potential listing agents, you can then compare their CMAs to see if they used the same comparable recent home sales prices to justify their opinions of your home's market value. Watch out for agents who estimate an unjustifiably high price (called "buying the listing"), or too low (called "low balling").

• Do you have a list of client references? Before selecting the best agent to obtain your listing, be sure to phone each agent's recent home sellers to ask "Were you in any way unhappy with this agent and would you list your home for sale again with the same agent?"

• What sales commission rate do you charge? Most agents will tell you their "standard commission" is 6 percent. But be aware sales commissions are negotiable. According to a recent nationwide survey by Real Trends, the average home sales commission is now 5.1 percent of the home's gross sales price.

However, negotiating a low sales commission can be self-defeating if no sale results. As there is a glut of homes now listed for sale in most markets, if you want your home to stand out from the others so it will be shown frequently by buyer's agents, cutting the commission usually results in fewer showings.

Paying an extra 1 percent of the sales price or offering a sales bonus vacation trip or plasma TV to the buyer's agent is often the difference between a sale and no sale.

If you decide to list with a so-called "discount broker" or flat-fee agent you will usually receive reduced services, such as having to host your own weekend open houses or not having your listing placed in the local MLS (multiple listing service).

• What is your minimum listing term? The best answer is "90 days." However, some agents insist on 120 to 180 day listings. That's fine, but be sure to include a written provision, such as "Seller may cancel this listing after 90 days without reason or cost." That prevents the listing agent from becoming lazy.

Watch out for any agent who says something like "The average days on market for homes in this area is 131 days." Your instant reply should be "Well, I don't want just an average listing agent."

• How long have you been selling homes in this area? Are you a full-time agent? What professional courses have you completed? The best agents will already have answered these questions in their listing presentations or in their professional brochure.

But don't necessarily dismiss a full-time, highly motivated new agent who has adequate managerial supervision with a highly respected nearby brokerage. A new agent could be much better than an "old pro," experienced agent with too many listings to give your home sale the attention it deserves.

• What is your marketing strategy for my home? At a minimum, each agent's written plan should include immediately putting your listing into the local MLS (the most powerful sales tool available to listing agents), showing your home's photo and information on the agent's individual and office Web sites, and on www.Realtor.com. According to recent statistics from the National Association of Realtors, more than 70 percent of today's home buyers start their search on the Internet.

Depending on the asking price of your home, each marketing plan should include a broker's tour, newspaper ads, weekend open houses, and ads in local home magazines. More expensive homes justify the listing agent using brochures and mailers to neighboring homeowners who could know of prospective buyers.

• What suggestions do you have to make my home more marketable? Do you recommend staging it? Agents hate to answer this question before obtaining the signed listing for fear of insulting the seller. But smart home sellers want to know. Often a minor change, such as replacing the 1950s outdated shag carpet with a neutral fashionable carpet, can change a home's character.

Or maybe the agent will recommend removing your old-fashioned furniture and having a professional designer "stage" your home to make it look up-to-date. Staging a home for sale has become very common among the most successful agents.

• How many listings do you currently have? Will I be dealing with you or an assistant, and how often will you contact me about sales progress? WHAT Percentage of your listings doesn't sell? Office assistants are often the sign of a highly successful realty agent. But watch out for a "numbers agent" who takes too many listings, knowing a percentage will sell, and forgetting about the rest. You want to avoid becoming just another listing to a numbers agent.

• Should my fixer-upper home be sold "as is"? Of course, only ask this question if your home needs considerable repairs that you can't afford or don't want to make before listing it for sale.

I've seen listing agents loan funds to sellers in such situations to make an otherwise desirable home more attractive to buyers. If the agent recommends marketing your home as a "handyman special," don't be offended but realize the buyer is likely to be an investor looking for a below-market purchase price.

• Other than yourself, who is the best real estate agent in this area? If the agent evades answering, then ask each agent what he or she thinks of the other agents you are interviewing. Respect each agent's answers. Of course, verify any negative information received about a competitor agent.

CHICAGO - Residential real estate, a shining star of the national economy that seemed unflappable over the past couple of years, has hit a speed bump.

Nationally, home price appreciation is slowing down from the rapid pace experienced by many markets over the past few years. Mortgage interest rates are on their way up. Is this any time to be thinking about investing in a home? Of course it is -- if you're buying it for a place to live, not as a speculative investment, and can afford to take the leap.

``Owning a home is still financially not a bad deal, as long as you have the income to support the cost of home ownership,'' said Jim Gaines, research economist for the Real Estate Center at Texas A&M University. Another caveat: ``You better figure on living there five or six years to make any kind of profit on the thing.''

Investors who hope to profit quickly on home sales, known as property flippers, for the most part have come and gone from the market, said Raymond Sierka Jr., vice president and regional sales manager with Harris Private Bank.

Speculators vanish

At the height of the real estate boom, people would buy houses before they were built at pre-construction rates only to sell the homes for a profit a short time later, often before construction was even complete. Speculators in some markets often could sell the property for a 20 percent to 30 percent gain, he said.

A normal real estate landscape boots out those speculators, said Anthony Hsieh, president of online lender LendingTree.com. ``It's just too risky to speculate now,'' he said.

People now are ``buying for the right reasons,'' said Diana Bull, a Realtor in Santa Barbara, and a regional vice president for the National Association of Realtors. Sellers no longer hold all the cards, she said, which is creating a more balanced market.

Below are several benefits of home shopping in a cooling real estate market -- the silver lining to news predicting the residential real estate party is over.

In a growing number of local markets, buyers have more time to think about a home before they make a decision on whether to purchase it. Last year, that often wasn't the case.

``Once you as a potential buyer found a house that met your needs, you had to jump on it right away,'' said Frank Nothaft, chief economist for Freddie Mac. ``One thing that we're seeing nowadays -- compared to six or 12 months ago -- is many markets where homes are staying on the market longer.''

Growing inventory

Home sales are expected to decline in 2006, yet the year should finish as the third-strongest on record, according to a midyear report given by Nothaft last month. With fewer sales, more housing inventory is sitting on the market.

It's a change of pace for agents who not long ago didn't have many properties to show their clients, said David Drinkwater, a Realtor in Scituate, Mass., and regional vice president for the National Association of Realtors.

``Two or three years ago, there was a great deal of reacting in the marketplace because we had a smaller inventory pool to work with,'' Drinkwater said. That's not to say that a well-priced property won't move quickly in this environment, he said, but buyers need to educate themselves so they can recognize a housing gem when they see it.

Current conditions in many markets also afford consumers a better opportunity to negotiate.

``This market is forcing everybody to slow down and take their time,'' Bull said. That gives buyers more of a say at the bargaining table.

No safety net

In fact, getting a fair deal is even more of a priority for homeowners who can no longer bank on high appreciation rates to save them if they pay too much, Drinkwater said. If you slightly overpaid in a bidding war at the height of the real estate boom, high appreciation rates helped correct the error, he said. In many markets, no such safety net exists anymore.

Average home value appreciation nationwide should be around 7 percent for the year, and is predicted to slow even further to 6.2 percent in 2007, according to Freddie Mac. Local markets vary, however, and even as some markets are cooling, others are still on an upward climb.

Even if you, as a buyer, have the benefit of being able to haggle more than you could last year, still remember to look for a place that meets your needs and your budget, Nothaft said. Do the calculations and lay the groundwork before your house hunt begins.

It's easy to get caught up in the upward scooting of mortgage interest rates. But take the northward movement with a grain of salt.

Chicken Little

Some people act like Chicken Little and feel as if the sky is falling when interest rates go up a quarter point, said Gaines of the Real Estate Center in Texas. Instead, keep it in perspective.

Interest rates are still far below what they were five or six years ago, Gaines said.

The annual average for a 30-year fixed-rate mortgage was 16.63 percent in 1981 and worked its way down to 9.25 percent in 1991, according to Freddie Mac records. Homeowners may not get rates quite as low as what they could secure in 2004, when the annual average for the 30-year fixed was 5.84 percent. But relatively speaking, it's still a deal.

If you're in it for the long haul -- that is, buying a home with the intention to live in it for years -- a home is still a decent investment.

Consider this piece of information from the National Association of Realtors: Since record-keeping began in 1968, the national median home price has risen every year. In a balanced market, home values typically rise at the general rate of inflation plus 1 1/2 percentage points. That's to say nothing of the tax benefits that come with owning your own home.

A look at the volatility of the stock market also proves the benefits of real estate as an investment, said Sierka, of Harris. ``The downside of real estate is better than the downside on just about anything else,'' he said.

The National Association of Realtors, the industry's largest trade group, said home prices probably will gain 4.3 percent this year, a third the pace of 2005, as higher mortgage rates increase the cost of buying.

The median price for an existing home will increase to $229,000 in 2006 from $219,600 last year, the group said in a forecast released in Washington. That would be below the 5 percent average annual growth of the last 50 years, according to data from Freddie Mac, the No. 2 U.S. mortgage buyer. In 2005, U.S. home prices gained 12.4 percent from a year earlier.

When all else seems to be failing, some weary home sellers look for heavenly intervention.

The tradition of burying St. Joseph's statue in the yard to sell your house more quickly has been around for a long time. Some say it dates to an order of European religious sisters in the Middle Ages who sought help in getting land for a convent. Others say it started in the late 1800s with a Montreal order of religious brothers who wanted a new chapel.

Stephen J. Binz's 2003 book, St. Joseph, My Real Estate Agent, fanned new interest. Binz says he was a doubter until he buried a statue and a week later was able to sell his house, which hadn't moved in seven months.

One company is marketing his book with a statue and prayer card for only $7.50. Others charge $6.99 to $9 for the statue and prayer kits on various websites.

Q: My wife and I are thinking about listing our $425,000 home for sale with a real estate agency, which charges a $1,995 commission. They will list our home for 30 days. During the 30 days, we can sell the home ourselves or if they sell it, we owe only $1,995. If another broker sells the home during the 30 days, he would write in his sales commission on the offer, subject to our approval.

During the 30 days, the listing agency will put a for-sale sign in our yard with an information box with flyers about our home. We would have to show our home to potential buyers if the listing agent isn't available to show it.

Our home will not be in the local MLS (multiple listing service) until after 30 days if it doesn't sell by then. This agency claims to be a full-service real estate firm. But competitors put their listings into the MLS within 24 hours after listing. Do you think we should list with this firm?

A: According to statistics from the National Association of Realtors, at least half of all home sales involve a listing agent and a buyer's agent. Most of those sales originate through the local MLS, the most powerful sales tool available to real estate agents.

Especially in the current buyer's market, why cut yourself off from half the potential buyers? They won't even know your home is for sale if it isn't shown in the local MLS and on the nationwide www.Realtor.com website, where 70 percent of today's home buyers start their searches.

Don't fool yourself. That is not a full-service real estate broker if you have to show your own home to prospective buyers. How will it be shown while you are at work or out of town? If your home isn't in the local MLS, and if it doesn't have a lockbox on the door so MLS member agents can easily show your home, how do you expect it to sell?

A yard sign and a few flyers are not enough to get a home sold for top dollar in today's market. You need a successful listing agent aggressively marketing your home. Before you decide to list with that discount broker, please interview at least three successful realty agents who sell homes in your vicinity. Listen to their listing presentations before selecting the best for your situation. Compare their success records with that of the discount broker.

David Berson, chief economist for mortgage giant Fannie Mae, put it this way: One of the few immutable laws of economics is that ''unsustainable trends eventually come to an end.'' And the end of the trend is pretty much where we are right now in housing.

Ben Bernanke, chairman of the Federal Reserve, was more opaque. In congressional testimony, Bernanke said, ''the downturn in the housing market so far appears to be orderly.'' In classic Fed-speak, Bernanke managed to simultaneously soothe -- and unsettle -- his rapt listeners. An ''orderly'' real estate downturn sounds OK, right? But what about ''so far''? What does that mean in practical terms for people who need to sell a house in the coming months? Could things unravel? And what about buyers -- could the property they buy be worth less a year from now?

Part of Bernanke's job description is to avoid specific predictions at all costs, so you won't get answers out of him anytime soon. But top housing economists such as Berson are paid to make specific projections and he offered them July 20 in a midyear forecast teleconference with Wall Street analysts.

Here is part of what he said, followed by some thoughts on what it all might mean for prospective sellers and buyers, or those already in the marketplace.

Berson thinks the Federal Reserve ''is not done tightening'' the ratchet on interest rates, and will move up short-term rates once again this month. After that, rates are likely to stabilize, bringing at least a temporary cessation to rising home mortgage rates.

He expects average home price appreciation, which had been running at a double-digit annual clip nationally for the past year, to drop to 3 percent or below by the end of the year. (On this point Berson is more bearish than most of his housing and mortgage industry colleagues, who project average appreciation in the 4 percent to 6 percent range.)

If speculative investors dump rental houses and second homes purchased during the boom years onto the market later in larger than expected numbers, Berson believes price appreciation could drop to a 1 or 1.5 percent annual rate -- a level not seen since the recession years of the early 1990s.

SWATHS OF FLORIDA

In a handful of markets where investors accounted for large shares of boom-time property purchases and where price increases soared for years, Berson believes ''there is a good chance of declines'' in average home values. Though he avoided naming all of the markets that Fannie Mae worries about, he did identify San Diego and parts of California -- ''though not all'' -- plus large swaths of Florida ``but not Orlando.''

Like many analysts, Berson says the weakest link in the housing market -- and the most vulnerable to price declines and investor dumping -- is the condominium sector. Many markets are glutted with unsold inventories of new and converted condo units already, and Berson is concerned that significant price corrections could be just over the horizon.

THE PROJECTIONS

What to make of such sobering projections? Here are a few thoughts:

• Neither Berson nor Bernanke foresees widespread property value declines as part of the current down cycle. Only in those markets where speculation was rampant in 2003-2005, and where job and population growth are anemic, are there risks of price declines.

• Neither anticipates mortgage rates to rise significantly higher than today's rates, which are still on the low side by historical standards. As long as financing is available and affordable, buyers will find ways to purchase houses.

• For all-weather real estate players, a flattening market means changing one's tactics, not burrowing away to hibernate until the market warms up. For sellers, it means getting acquainted (or reacquainted) with the toolbox of techniques developed during the down periods of the 1970s, '80s and '90s to move houses. For example, seller financing, where you take back a second note on concessionary terms to push the sale, take back a first note if you can afford to, or ''buy down'' your purchaser's interest rate to lower monthly payments.

Experienced real estate brokers can fill you in on these strategies, along with their pros and cons. They can also guide you on how to price realistically to sell now, not five months from now.

For buyers, down markets often offer exceptional opportunities to acquire real estate at prices and on terms that were unthinkable just a few years before. Again, the message is: Don't go to sleep. To the contrary, get off your duff and scour the market for properties that may never be cheaper, or even available.

Heads-up real estate is, as the industry adage goes, the art of the possible. You've simply got to adapt to the changed market conditions. And probably work a little harder.

Mortgage application volume fell to its lowest level in more than four years last week, the latest indication that the once red-hot real estate market is cooling down.

The Mortgage Bankers Association reported Wednesday that its market composite index, a gauge of mortgage loan application volume, fell to 527.6 last week, down 1.2 percent from the previous week's reading of 533.8. This is the lowest index reading since May 2002.

Despite all the talk about a dearth of buildable land in South Florida, Broward County recorded an increase in housing starts during the second quarter.

Broward had 900 starts, up 54 percent over the second quarter of 2005, according to a report released last week by West Palm Beach housing analyst Brad Hunter.

"I don't know specifically what explains it," Hunter said, before speculating that one or two large developments are responsible for the increase. "But land is scarce -- that story hasn't changed."

By contrast, Palm Beach County's 1,508 home starts in the second quarter represented a 36 percent decline from the second quarter of last year.

Other housing tidbits from Hunter's Metrostudy consulting firm:

>There were 1,621 people moving into homes in Palm Beach County during the second quarter, down 8 percent from the first quarter of 2006. Hunter said he expected more, given the increase in supply of homes being sold by investors.

>Broward has 2,724 finished vacant homes and homes under construction, which represents a 16-month supply of inventory. In other words, that's the amount of time it would take to fill up those homes if no others were built.

>Palm Beach County has 653 finished vacant homes, which equates to a one-month supply. That's the lowest in South Florida, but it's still rising.

"In the short term, there's a competitive problem for sellers," Hunter said. "In the long term, once we work through this, we'll return to an undersupplied market."

>Rental rates for office space have increased in Broward and Palm Beach counties, according to Cushman & Wakefield.

Rents in Palm Beach County's most prestigiousbuildings rose $2.22 a square foot from last year to $31.81, according to Cushman's midyear market report. In Broward, rates rose $2.87 to $29.07 over the same period.

Meanwhile, Broward's vacancy rate of 11.1 percent is down 1.2 percentage points from the first quarter and 3.5 percentage points from the second quarter of 2005.

Palm Beach County's vacancy rate essentially remained unchanged at 12.8 percent compared with midyear 2005.

But Brian Waxman, a West Palm Beach real estate broker, says Cushman's vacancy rate might be too conservative.

"We own 1.2 million square feet of office space, and we have 98 percent occupancy," he said.

A lack of new construction is the main culprit. And developers aren't building, for the most part, because of rising costs of construction and commercial insurance.

"It's a major bloodbath right now," Waxman said