At the risk of removing all doubt of my simplicity, I am offering the following rant as a result of a comment I overheard at an open house I hosted yesterday: (husband in a low voice to his wife) "I learned in college that the way to make money is to buy low and sell high. Let's keep looking."
When Adam Smith offered this axiom in his Wealth of Nations, he was not writing of the real estate market! It's a simple concept, but simple only if an investor is patient and if the object purchased increases in value over time.
The trouble with any real estate market is that too many buyers and sellers parrot "buy low, sell high" and act accordingly. That means many buyers insist on buying low at the same time many sellers insist on selling high.
Our young buyer needs to understand that this is the time to buy low, but not from a seller who believes he can sell high despite market conditions. The seller needs to understand that unless his selling price is attractive to a buyer who (can you believe it) wants "a good deal," he will not sell at all, let alone sell high.
If the seller has bought low in the past and earned equity in the home, then he can sell high--at least higher than his original purchase price. But that's it.
Buyers need to be aware of market conditions, recognize when a particular property is offered at a relatively low price, and jump on it.
Sorry if this insults your intelligence. But I feel better for having written it. Thanks for reading.
No comments:
Post a Comment