Lose Money on the Sale of Your Home Now
by Evan Vanderwey on 28/05/10 at 12:25 pm
There has never been a better time to lose money on the sale of your home.
I am becoming more and more convinced that we will look back on this year, 2010, as the year we should have made that real-estate transaction.
What traditionally happens in volatile markets like stocks and bonds (and Real Estate these days) is that most people ask to be put on the bench just when the game gets interesting. Rather than riding it out, they wait it out. A few stay in and make a killing, but by and large most will miss out on the bulk of the gains because they were waiting.
Waiting for what? What is the signal that most people are waiting for?
They are waiting for “most people” to stop waiting.
Sadly that means they will be buying later at a premium price FROM those who were playing the game all along.
I met with a couple yesterday who, in the middle of this down market in East Lansing, MI, are not sitting out.
They have a very nice home in one of the beautiful neighborhoods near the Campus of Michigan State University (Go Spartans!). They paid in the $180’s for it in 2003 and their agent just gave them a current list price of $190,000. That was not easy to hear but it did not stop them from moving ahead.
They then added up how much they spent on that home making improvements over the past seven years. Adding a main floor bath room, extensive master suite work and a new kitchen, all of this was well over $20,000. That means they would lose money if they sold at $190,000. Still they were undeterred and made plans to list their home.
Their agent then told them that they would not likely get an offer at $190,000 but something lower. The lower lip curled in just a bit at the thought of just how much lower, but then, they pressed forward to find out.
What is it that causes these homeowners to boldly move ahead through all of this bad news?
Opportunity!
The neighborhood they wanted seven years ago but was out of their reach is now on sale. They can trade up today and afford what they could not afford before.
Seven years ago, the homes on the other side of the neighborhood were going for $290,000 to $325,000.
They just made an offer on their dream home for $205,000 and will likely get the deal at around $215,000.
They are very willing to give someone a $50,000 deal on their old home and sell for $180,000, or even $170,000, and get a nice deal of their own – $100,000 off.
All they had to do was play the game.
What in the world is everybody waiting for?!
