The Real Secret
The Real ‘Secret’
Last year, one of the best selling books, and most popular DVD’s was entitled ‘The Secret’. It pertains to ‘the law of attraction’. We attract what we think about. A wise man once said, “Our thoughts precede our actions, which form our habits, which create our destinies”.
I have discovered a real estate secret. A property is only worth what someone is willing to pay. Imagine that! It’s a secret because many sellers have not discovered that truth. Some people believe their home is worth what they wish the value would be.
A skeptic might ask, “What’s the value before I locate a buyer, Mr. Real estate expert”? My answer is, and has always been that I can give a seller a price range, but a specific price should be determined by an appraisal. This is my litmus test to see if a seller is ‘serious about selling’.
If the supply is low, as it was in 2005, a house might sell above appraisal. The corollary is also true. In this market, with elevated inventories, most houses will sell below appraisal. In other words, in 2008 an appraisal represents the ‘ceiling’. This is usually the most a property will command. The floor is 10% below that value. If the property backs to a busy street, is in disrepair, competing with new construction, short sales or repos, the floor could be 10% to 20% below appraisal.
In my opinion, real estate prices will continue to drift downwards until after the presidential election later this year. That means get an appraisal fast. Price the property below appraisal rapidly. React to an offers quickly. And, complete reasonable repairs immediately.
