Theory of Relativity in Relation to Real Estate by Mike McCashland

I love watching How The Universe was made all the History Channel. I am not sure I understand half of what they talk about, but I try. As usual most of these discussions center around Albert Einstein’s Theory of Relativity. I hope Albert isn’t offended if I use a Theory of Relativity in relation to Real Estate.

When ever I talk to people about listing a property for sale I always find that they all
want the same thing. Inevitably they all seem to want to list for more than what the home
is actually worth. It is understandable that sellers want as much as possible, and it is my responsibility to get as much as possible for them. Sometimes, holding out for a higher price can be the counter- productive.

Let’s apply my Theory of Relativity to the following scenario. I have a Seller who wants to get fuIllist price even though he understands that it is listed above current market
price. The Sellers stand is that they will wait for the Market to come up to what they want. After the Sellers get what they want They want to buy a bigger house for more money. What sellers need to understand is that the market is relative. In a rising market my Sellers will eventually get what they are asking. What Sellers need to also remember is that the home that they are hoping to purchase has also gone up in price. A 3% increase on a $200,000 property you want to sell is $6000. A 3% percent increase on a
$400,000 property that you want to buy is $12,000. My Sellers just lost $6000 of Buying power.

Understanding the Relativity of where the money is going after the sell of a house is very important to the price that a Seller is asking for home.

Leave a Reply

Your email address will not be published. Required fields are marked *