The once red-hot housing market has cooled, and some sellers now need a reality check.
That means real estate agents angling for listings find themselves delivering the bad news.
"Our market was full of inventory of listed properties that were 25 percent overvalued," says Dan Paine, corporate broker at Liberty Realty. "There were 10 buyers for one home; now there are 10 homes for one buyer."
In that market, says Dan Rider, a broker and owner at Dickson Realty, "It's all about having a good bedside manner. It's about having great tools that you can lay down in front of a consumer so they get it."
Those tools include a current market analysis based on Multiple Listing Service sales figures.
Timing is everything in those proposals. Nothing older than six months is relevant; better still are stats from sales logged within the past three months.
At Keller Williams Group One Realty, broker Steve Haley says, "We even try and get specific about neighborhoods. Certain neighborhoods are doing well; others are stressed."
Despite the downturn, owners continue to list houses, whether they're empty-nesters looking to downsize or troubled borrowers looking to make their escape, says Larry Johnson, office manager at the Mae Anne branch of Ferrari-Lund Real Estate.
To move that inventory, some companies focus even harder on training.
Agents at Dickson Realty are offered a 12-week program that includes two full classes on pricing, says Rider. The company recently hired Stephanie Kruse, a principal of the marketing firm KPS/3, to coach agents in marketing their properties and themselves.
"We've put a lot of effort into providing agents with the tools to help the consumer understand the situation," says Rider, whose office translates MLS data into charts and graphs to illustrate current sales.
Liberty Realty invites speakers from lending and title companies to speak to agents about the types of transactions that are closing.
And at Keller Williams, title officers teach half-day classes on short sales and foreclosures.
(A short sale results when a seller owes more on the house than the sales price will bring. The seller or sales agent must then negotiate a solution with the mortgage company.)
Maggie Bird, president of Remcor Realty, says her agency invests heavily in training so its agents can keep sellers out of short sales.
"We can salvage the equity position," she says. "If a seller has a property that's 20 percent short, we teach ways to neutralize those losses."
Her philosophy: "Every seller is a buyer of something. It may be a piano; or maybe a motor home. If you're looking to resolve an equity position, make up the differential in the form of something else."
Other brokers remind agents that they can't bask in the warm glow of nostalgia.
"I tell my agents you have to take '04 and '05 out of the picture," says Paine at Liberty Realty. "It was a runaway market. It taught agents how not to work. During that time (the industry) got 100 percent new agents. They think people will tackle them in the street to give them a listing."
At Dickson Realty, Rider says, "The trick is to help the seller see the situation even when those sellers are in denial."
And that happens a lot.
"Most of the time they don't listen," says Roy McWilliams, broker at Coldwell Banker Village Realty where sales agents are trained to deal with a market in denial. "We do a comparative market analysis and go in there with the facts. But they don't believe you, and what happens is the property just sits there and doesn't sell. They believe it's going to get better."
A reality check can be a bitter pill, but real estate agents must stand firm.
"If you take on an overpriced listing all you are doing is preparing the property for the next agent," says Johnson. The third agent to handle a listing often is in a good position because the seller feels beat up by then. But there's no point being among those first two Pollyannas.
How to avoid being a Pollyanna?
Says Paine, "Some are still in a state of denial and I would counsel my agents not to take the listing,"
But counseling of sellers is fraught with dangers.
In real estate, cautions Haley, counseling doesn't cross over into human relations or psychology. "Litigation is so tough that you open huge doors to litigation down the road should someone say, when dealing with a stressed seller, 'I've had training in counseling.'"
Counseling sellers, says Paine, means advising them to offer the buyers' agent a decent commission.
"If there's traffic, buyer and seller will agree on a price. But if they're not offered a decent commission, they'll show five down the street who are offering more," he says.
