Recently, the folks over on GOOD magazine’s blog asked the question: Which class in high school or college impacted you the most? Why?

Now, I was a bona fide school fanatic — three degrees over nine years, and I’d still be in school if I hadn’t realized the need to make a living at some point! So, I’ve taken a lot of classes, with lots of teachers and loved a bunch of them (both classes and teachers). Nevertheless, my answer was clear: social psychology.

Why? This class, which explored the interactions of people with each other, within and outside of groups, was probably the single course that changed my everyday interactions with people at home and at work in the most ways.

To this day, many times a day I apply and exercise skills I picked up in that course, and I’ve heard and observed, hundreds of times, these interactions have the effect I wanted or needed them to. (Thanks, Dr. Noel!)

Probably the most influential of the skills I picked up in that course, at the age of 18, was the skill of active listening — a listening technique that facilitates focus on and understanding of what the speaker is saying, and also communicates to the speaker that the listener truly cares about and comprehends what he or she said. I won’t get into the details, but suffice it to say that in order to use the technique of active listening, you do have to actually listen to what the speaker is saying to you.

These days, I wish we could do a little active listening tutorial specifically for the various players in the real estate market. Because they just aren’t listening! Of course, it’s also quite possible that a little mini-course in abnormal psychology is also needed here. Because what I’m seeing is not only poor listening, but that familiar coping mechanism: denial.

Buyers are not listening to their agents when they caution them about short sales. "They take a long time," the agents say, "really long, like six months or a year. And many of them never close — ever. If you decide to get into contract on one, just don’t get your hopes up."

Yet and still, I get e-mail after e-mail from jilted short-sale buyers wondering whether it’s strange that they’ve been in contract for four months with no word from the bank.

Sellers aren’t listening, either. I continually receive inquiries as to how much they should list their homes for, providing me all manner of detail about how much they need to move to their next house and how much they need to pay off their current mortgage and other bills, but omitting all information about what the similar homes in their area have sold for recently.

Your home’s value has zip to do with how much cash you need, sellers — it’s all about what a qualified buyer will pay for it, now, and the best indicator of that is what qualified buyers have been paying for similar homes recently.

But many sellers are simply not hearing or are willfully denying the facts underlying their home’s true market value, even when their agents bring them a sheaf of comparable sales documenting it.

And, perhaps least surprisingly, legislators aren’t hearing it. Everyone agrees that the homebuyer tax credits were somewhat effective at creating an urgency on the part of buyers, where it didn’t otherwise exist. But in terms of long-term healing of the housing market, in terms of stimulating ongoing homebuying activity, it’s not incentives America needs nearly as much as jobs.

I watched "The Secret." I know there is a place for staying unerringly positive, and focusing on the things you want to happen, rather than on the outcomes you hope to avoid. But there’s also a very large role in a mature approach to real estate decision-making and planning out your personal finances for operating in reality — even if that reality is not exactly what you wanted, facing it empowers you to take control of the elements of your situation that you are in a position to control.

Buyers can prioritize "regular" equity sales or short sales that are listed by agents with a strong record of successfully closing them, or can at least avoid the panicked, crazed feeling of being stuck in short-sale limbo without understanding why. Sellers can decide that this is not the right time to sell, or can get real with themselves about the aggressive pricing it will take to position their home competitively for sale against all the short sales and foreclosures on the market.

Denial can be an effective coping mechanism, but the real estate reality will come home to roost, sooner or later. The sooner we all drop the denial, the more powerful we will all be.

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