What a fascinating week we have ahead. Europe confirms, and America decides on massive stimulus programs.
When I was a boy I asked my father, who was a banker all his life, ”can we go to Disneyland for our holidays?” and he said, “no, son, we can’t afford it”. I said “but you work at the bank, why don’t you just print the money?” and in a stern voice Dad replied “printing money ruins countries, it is also the greatest crime a government can do to its people”. A fairly strong answer for a simple request to go to Disneyland.
Is the Government hoping just to inflate the debt away, or just put off the problem, or is this the solution? In the meantime, the debt grows at a destructive rate.
Back to real estate. My stockbroker sold his house through the week, before auction. He had a beautiful home in Manly, with a glass sided pool, minutes to the beach. He had massive numbers through the opens and beautiful photos on the net. All his friends were telling him he’d get an enormous sale price on the home.
Being a stockbroker he knows that the market is the market, that you can get lucky but, generally, you get what the market is prepared to pay. In his own words “we couldn’t find the trophy buyer. I received $100,000 less than I wanted but I sold the home in three weeks. I had a great campaign, several buyers around the same price, so that was the market”. Having spent a lot of money, time and effort on the presentation and promotion of the home, it was disappointing to get less than he wanted or expected, however he agreed with me that the time was right to sell and there were a lot of factors in his favour, including some nice sunny days. This, readers, is the market!
I harp on this week after week because I consistently come up against the same issues where four or five buyers are all bidding on the one property, all within a very tight range, and owners refusing to accept that’s the market. No-one likes losing money, or getting less than they want, however generally what you lose you make up and vice versa in the real estate merry-go-round.
I think the Spring real estate market started yesterday. Let's see if I'm right.
The most important thing is you don’t hold out believing you’ll get more by waiting another week, month, quarter. It’s just not happening in this market.
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