In the mind of the seller, it's 2007. Sure, the economy has changed. Sure, other areas of town are losing value. But this home is the nicest one on the block, with great neighbors, granite counters and a finished basement.
In the mind of the buyer, it's 2012. Unemployment is at 14%, the stock market has dropped to 6,000 and employers are downsizing left and right. The buyer asks, "How much home can I afford if my wife loses her job?"
The seller is unreasonably optimistic, and emotionally attached to the past. The buyer is unreasonably pessimistic, and driven by fear.
Agents have a job to do right now, and it's called EDUCATING YOUR CLIENTS.
Show them the numbers. Explain the change in psychology. Talk about the conditions that drove values up during the first half of the decade, and the conditions that are affecting values now.
Talk about why all the builders are gone, as are half of the mortgage lenders. Talk about how one-third of the agents in business today will be doing other things in three years.
Talk about the strength in the market (under $250,000), and where the market is teetering (above $400,000). Show them MLS printous and listing histories for competing properties. Explain strategy, and why it matters.
Explain to your sellers that the tax credits are going away and interest rates are going up. Discuss the new layers of regulation that are making it increasingly difficult to finace condos. Show them why pricing their home correctly, or adjusting the price now, is essential.
Explain to your buyers that there will always be demand for the best homes in the best areas. There's plenty of junk for cheap, if that's what you want. But this present market calls for reality on both sides.
Recognize that this is a stressful market, with many stressed out participants. People are looking for agents with character and competence. Intentions don't matter. Results do. It is a professionals' market, and going forward you will be paid only for your skill (and not your time).
Selling in this market is the art of mastering what is possible. But that means finding common ground, tackling unrealistic expectations, and educating your clients to the point where they are confident in taking action.
It also means that negotiations are tougher than they have been in years. It means keeping emotion out of the deal, and fighting for your clients every step of the way.
So, should your agent tell you what you want to hear, or tell you what you need to know?