The cooling housing market is upending the conventional wisdom that guided buyers and sellers during the housing boom. The changing dynamics have implications for a wide variety of players in the real-estate market.

Such strategies aren't entirely new, but they had fallen from favor in many markets as home sales heated up early in the decade. Recently, markets have shown signs of cooling. The number of homes for sale has climbed about 30 percent over a 12-month period, reaching its highest level in nearly 10 years, according to the National Association of Realtors. The group recently predicted sales of existing homes would drop 5.7 percent this year versus a 4.4 percent gain in 2005.

But in many parts of the country, after several years of sellers calling the shots, 2006 is shaping up to be a market in which buyers are gaining bargaining power. In New York City, where the housing market has begun to cool, some buyers are now getting condo developers to pay city transfer taxes and certain other expenses that can total 3 percent to 4 percent of the purchase price, says Jeffrey Jackson, chairman of appraisal firm Mitchell, Maxwell & Jackson.

What follows is a look at what this means for different groups of buyers and sellers.

Sellers

Say goodbye to the days when sellers could simply look at what their neighbor's house sold for and then list theirs for 10 percent more. Brokers are advising sellers to make sure their house comes across as a good value relative to other homes on the market.
In determining a home's value, consider everything from the height of the ceiling to the quality of any renovations and whether the front door creates a good first impression.  Overpriced homes may never even catch the eye of their intended audience. That's because buyers and brokers increasingly rely on computers to screen listings based on price, size and other parameters when new properties come to market. Also, listings typically generate the most excitement and interest in their first few weeks on the market.
Brokers are also telling sellers to fix problems that buyers might have overlooked in a more heated market. Simple updates to appliances may have a minimal return on investment but you shouldn’t keep things that may be considered a total turnoff to potential buyers.

First-Time Buyers

As the housing market cools, first-time buyers have the opportunity to be more thoughtful about their purchases and to negotiate for a lower price, a more flexible move-in date, or incentives such as seller-paid closing costs.
Some brokers are advising first-time buyers to leave a financial cushion instead of stretching as much as possible and counting on rising home prices to bail them out. They are also asking sellers to help with closing costs.

Move-Up Buyers

Move-up buyers face the delicate task of balancing a purchase with a sale. A growing number of buyers are making offers that are contingent on selling their current home. But such offers are often frowned at, in part because these deals are more likely to fall through.
In some parts of the country, such as California's Silicon Valley, cooling is most evident in the higher end of the market, good news for homeowners looking to trade up.

Relocaters

People who are relocating for a job often can't afford to let their home sit. Employers are looking for ways to ensure that homes don't languish on the market when an employee relocates. Making sure the new house will be easy to resell is also crucial for people who are likely to be transferred again in a few years. Some relocation experts also advise transferees to shy away from buying a home in a brand-new development.

Investors
As the housing market cools, investors used to seeing quick profits in once hot markets such as Phoenix, Washington, and southern Florida may be disappointed. In Tampa Bay, Fla., investors can still find buyers for one-of-a-kind homes in established neighborhoods. But in some new subdivisions, dozens of similar investor-owned homes are competing for buyers. But the decision to sell or rent can be tricky, particularly if the rental income isn't enough to cover the mortgage and other carrying costs.