Equal gain and pain
Sam, a past client e-mailed me yesterday and asked if I would update him on the current market value of the home that he purchased in Rocklin 14 months ago. Sam had picked out a new home with lots of upgrades and an $800,000 price tag. It was a beautiful home and Sam had me sell his Roseville home located in a very nice development in order to afford the move.
A number of clients moved to larger homes during 2004 and 2005. They would sell their existing home where they had built up a substantial equity position and buy a newer, larger, nicer home with from their sale proceeds. The average market time to sell an existing home was less than 30 days and sellers and were getting premium price. It was a great time to convert equity to cash and buy something else.
My research discovered that Sam’s new $800,000 home that he purchased 14 months ago was probably now worth $700,000. The builder had dropped the prices in the development in order to liquidate their inventory before going into the fall and winter months. Fortunately Sam didn’t want to sell his home he only wanted to know how much the value had dropped.
Most sales people avoid telling people what they don’t want to hear. To be successful in sales, a positive enthusiastic attitude is important. We don’t like disappointing clients and I knew Sam was going to be really disappointed when I told him the values of his property had dropped $100,000 in the last year. So I did a little research before I made the call.
I checked on the value of Sam’s old house in Roseville. It was located in a large development and I easily identified three identical models that had recently sold, one on the same street. I discovered the values had dropped $100,000 from what Sam had received from his sale. If Sam had stayed in his old house it would be worth $100,000 less.
Sam wasn’t happy to hear that the current market value of his new home had declined by $100,000 but knowing that if he had stayed in his old home it would be worth $100,000 less was a small consolation. “Well”, he said. “It was all paper anyway!” Not exactly I thought to myself but if one is buying and selling in the same market the pain or gain will be equal.
A number of clients moved to larger homes during 2004 and 2005. They would sell their existing home where they had built up a substantial equity position and buy a newer, larger, nicer home with from their sale proceeds. The average market time to sell an existing home was less than 30 days and sellers and were getting premium price. It was a great time to convert equity to cash and buy something else.
My research discovered that Sam’s new $800,000 home that he purchased 14 months ago was probably now worth $700,000. The builder had dropped the prices in the development in order to liquidate their inventory before going into the fall and winter months. Fortunately Sam didn’t want to sell his home he only wanted to know how much the value had dropped.
Most sales people avoid telling people what they don’t want to hear. To be successful in sales, a positive enthusiastic attitude is important. We don’t like disappointing clients and I knew Sam was going to be really disappointed when I told him the values of his property had dropped $100,000 in the last year. So I did a little research before I made the call.
I checked on the value of Sam’s old house in Roseville. It was located in a large development and I easily identified three identical models that had recently sold, one on the same street. I discovered the values had dropped $100,000 from what Sam had received from his sale. If Sam had stayed in his old house it would be worth $100,000 less.
Sam wasn’t happy to hear that the current market value of his new home had declined by $100,000 but knowing that if he had stayed in his old home it would be worth $100,000 less was a small consolation. “Well”, he said. “It was all paper anyway!” Not exactly I thought to myself but if one is buying and selling in the same market the pain or gain will be equal.
posted by Ken Calhoon at 8:59 AM
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