And I’m not selling for a penny less!!!!!!
Categories: Real Estate News, Selling Real Estate
hi
So I was talking to a guy the other day about listing his house and we got pretty quickly to the part where we talk about what he thought he should get for it. He’s an accomplished businessman ready to retire and because he can take his “portability” tax structure with him, wants to downsize and move upstate. Perfect. I show him what houses like his—in an older but very nice neighborhood—have been selling for lately. The conversation is getting pretty quiet, because it’s becoming obvious that he’s thinking much higher than I am. He’s stuck on $1.8 million and I’m coming out at $1.3, $1.35 million if you stretch it. To me, the facts of what is selling are obvious. To him, his house is worth way more than that. So I say “You’re not a greedy guy, are you Frank?” Somewhat taken aback he says, “No, I only take what’s coming to me.” So I ask, knowing what the answer is, what he paid for the house when he bought it back in 1974. “$40,000 and that’s when $40,000 was a lot of money!” Frank says. “Well, let’s see exactly how much that $40,000, properly invested, might be worth today and compare it to what your house is worth according to this market,” I say. So I break out the laptop and we go to this Investment Growth Calculator and plug in the data. It turns out that if you invested $40,000 thirty-four years ago at 7% annual return with compound interest (and who wouldn’t kill for that rate over time?) an annual inflation rate of 2% and a taxation rate of 25%, that $40,000 would be worth about $228,000 today. So, bottom line, if we sell his house for $1.2 million, he’d be making a million dollar profit having lived in it for 34 years. Not bad pay. But you know what, he’s still not going for it because he knows what his house is worth. So I wish him good luck, we shake hands and part company. Maybe after he thinks about it for a bit he’ll change his mind. I’ll stay in touch, of course.
If you’d like to know what your house is worth in today’s market, I’ll be glad to give you my opinion. You can reach me at 305-401-8058 or bishopric.r@ewm.com.
