In real estate, they say you make your money when you buy, not when you sell. Let’s break down why this is often the case.
Buying real estate at a great price sets the stage for potential profits. For example, consider a house in my neighborhood that recently sold for $1.56 million, despite being smaller and having a less impressive view than mine. My similar house, purchased under different circumstances, appreciated significantly, showing how a good buy can lead to substantial financial gains.
Negotiating a real estate purchase is crucial. After buying my house, I discussed its value with the selling agents, who were confident it could fetch between $1.85 million to $1.9 million. This would mean a profit of $440,000 to $490,000 when I decide to sell. However, these numbers only matter if I actually sell. It’s interesting to note, especially with tech companies like Airbnb, Uber, and Snapchat going public, that high salaries in tech can inflate real estate prices locally.
Purchase negotiations were key when I bought my house. The agent originally listed it for $1.24 million, but after four weeks without suitable offers, I secured it for $1.18 million. Working directly with the listing agent saved on commission costs and built a personal connection, which can be as valuable as a good financial deal.
The relationship I built with the listing agent, John, over negotiations was instrumental. After initially agreeing to my offer, John mentioned a higher offer, but due to our agreement, he stuck with me, showing the power of personal connections in real estate deals.
Ultimately, knowing the ins and outs of the buying process, what sellers and agents desire beyond price, and maintaining integrity in your dealings can significantly impact the success of a real estate transaction. Always remember, the best real estate deals are those where both parties feel they’ve gained something valuable.
