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THE MOST IMPORTANT REAL ESTATE QUESTION

How to make (or lose) a small fortune.

by  Neil Jenman

Article written and provided by Neil Jenman from Jenman.com.au . To see the original source of this article please click here. https://jenman.com.au/the-most-important-real-estate-question/. Neil Jenman is Australia’s trusted consumer crusader. He can support you, all the way, from choosing an agent who will get you the highest price guaranteed to when your removalist comes! You get an unprecedented level of total support. All for free. To find out more visit jenman.com.au

Reading time: apx 4.5 mins

In today’s real estate world the key to a good financial result is knowledge. Those who know the most are those who sell for the most. And buy for the least.

Some people are adept at that often sought but rarely achieved outcome: Sell high and buy low.

But such people are the minority.

When it comes to selling and buying, most people sell too low and buy too high. These two factors can amount to hundreds of thousands of dollars, sometimes millions of dollars.

HOW CONSUMERS LOSE MONEY IN REAL ESTATE.

Make no mistake, if you sell for thousands of dollars less than you could have sold and then you turn around and buy for thousands of dollars more than you needed to pay, you have lost money. Usually a lot of money.

Indeed, when selling and buying a property many people lose more money than they earn in wages in two or three years.

And never mind their earning power, consider their savings ability.

How long does it take the average family to save, say, one hundred thousand dollars? Two years? If they’re lucky.

For most people, accumulating a hundred thousand dollars in savings takes at least three years, often closer to five years.

And yet when buying and selling a home people regularly lose far more than a hundred thousands dollars. And that’s just for average priced properties. For big ticket homes, losses can be millions.

Farmers, for example, often choose to sell their properties by auction. In doing so, they can lose more with that one ill-informed decision than they earned in profit from a decade of farming – sometimes a lifetime. It’s as if they drive away from their family farms after years of hard work – and leave a few million dollars in the hay shed.

And doctors – who are notoriously poor money managers – spend decades improving their medical knowledge which gives them a huge income. But few spend even days (never mind weeks) improving their real estate knowledge. The nation’s medicos collectively lose hundreds of millions of dollars annually in their real estate dealings.

The major reason for such losses – in both selling and buying – comes back to the failure to know (and more importantly, understand) the most important real estate question.

When you know and understand the most important real estate question, you’ll be able to sell your property for the absolute highest possible price. And, later, when you buy, you can use this question to buy properties well below the price you are willing to pay.

So, after all this build-up, what is the most important real estate question?

Here it is – in just seven simple words:

“What price will buy this home today?”

This question is your greatest friend when buying a property. But be very careful. When selling, this question is your greatest enemy.

UNDERSTANDING THE QUESTION.

Here’s how successful sellers and buyers understand and use real estate’s most important question.

The most important knowledge you need to discover when buying a home is the lowest price the sellers are willing to accept. This is why auctions are great for buyers – because the sellers are forced to reveal their lowest price (called the reserve), but buyers never have to reveal their highest price.

Think about that before you get conned into selling by auction.

If an agent does not do auctions, you can still buy below your highest price by asking that seven-word question: What price will buy this home today?

Watch what happens when you ask this question of most agents – whose ignorance when it comes to negotiating causes sellers to lose massive amounts of money. The agents will immediately scurry off to the owners demanding to know: “What will you take?”

Such stupid incompetent agents – most of them.

Agents, you are paid a massive commission by sellers. It’s your fiduciary (and moral) duty to get the best result for the sellers. You should never ask sellers to reveal their lowest price – or even to reveal the price they will accept today.

An agents’ job – which most are incapable of doing – is to discover the buyers’ highest price.

When buyers ask that seven-word question: “What price will buy this home today?”, the agents should say, “How much are you are prepared to pay today?”

Of course, as mentioned, most agents are criminally ignorant when it comes to the art of negotiation. An agent’s biggest skill – which they learn in real estate school and which is drummed into them by ignorant and unethical trainers – is how to push owners down in price.

PROTECT YOUR ASSET.

So, if you are a seller and an agent wants to know how much you will take today, tell them to come back with what the buyers will pay today.

Of course, you may ask: “How do I know when buyers are offering their highest price?”

That’s easy. Insist that the buyers sign a Buyers’ Price Declaration.

So, there you have it – doctors, farmers, mums-and-dads, everyone interested in buying or selling real estate. The most important real estate question – whether buying or selling – is “What price will buy this home today?”

If you are buying, your aim is to find the answer to that question.

If you are selling your aim is NOT to answer that question – under any circumstances.

Knowing this important question and understanding it plus knowing how to use it can easily mean hundreds of thousands of dollars extra for you – whether buying or selling.

Just think how long it takes you to save a hundred thousand dollars. Knowledge is powerful in the dangerous world of real estate. Be careful.

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