Thinking of selling your house? This is what you're up against.

Thinking of selling your house? This is what you're up against.

About one-third of Southern California homes sold in February had been foreclosed since January 2007, according to DataQuick. In the last real estate bust, Southern California home prices dropped 19% between 1991 and 1997, according to DataQuick.

Those foreclosures are your competition. The banks won't sell for pennies these days, but they will do what they can in terms of price reduction to offload the property as fast as they can. How can you compete against that? Price competitively. Offer something those foreclosed homes don't (great landscaping and fresh exterior paint for instance).

Also, if there are few or no foreclosures in your neighborhood, advertise that. People don't want to buy into an area that is on the downward path. The fears of the suburbs becoming the next slums are very real. Located in an area with urban planning? Use that to your advantage.

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