When It Comes to Real Estate, Your Friends May be Embellishing the Truth
I can not tell you how many times, as a licensed, professional real estate agent, I have run into stories about the awesome deal my client's friend got. T
he tales are like fish stories my Dad used to tell. You know, the story in which the mega fish that got away changes six inches to a foot in length from one retelling to the next. That's what the deal you are recounting that your friend got sounds like to me. Unfortunately for your friend, who wants to be the most amazing negotiator ever when they recount their tale of real estate prowess, the facts of real estate transactions are there in the tax records for the world to know.
That home your friend bought for $600K that was listed for $1 Million was indeed listed for $1 Million two years prior. The market tanked and the home lowered its price and lowered its price as values came down. Know how much it was listed for and what your friend paid? It was listed for $725K and your friend got it for $699K. Was it worth $1 Million when your friend bought it? I'm afraid not. It probably wasn't worth $1 Million when it was initially listed years ago. The true market value at the time your friend bought? $$700K. Congratulations. They saved $1K!
What about the friend the bought a foreclosure for $150K? Eh. Not so much. They paid $178K. Why did they tell you they paid $150K. I don't know. Pride? Turns out that the foreclosure they paid that much for was probably only worth $160K, given the amount of work you say they put into it. I suppose they've figured that out and now what to adjust reality to make them look better.
If you've hired a licensed, professional real estate agent to help you navigate the market, TRUST THEM. They must hold a license to do their job. They are ethically bound to do what's right by you. Your friend can lie to you up one side and down the other. Sure what they are telling you sounds good, but it may have no factual basis at all. And every real estate agent knows that facts and figures are what matter in real estate, not fish stories.
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