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It is not a loss, if you buy in the same market as you are selling in- equity trade

By Steve Loynd

Managing Real Estate Broker with Alpine Lakes Real Estate Inc., NHRE# 02863

July 24, 2010 05:53 AM

Convincing a seller a price reduction is not a fire- sale but a chance to trade equity in to a move up property. A condominium owner has been following the comps (with my help) in his complex. He admitted the numbers were depressing, but with his growing family he has no choice but to sell in a down market, in order for him to buy larger. I convinced him to reduce his price below the others offered in his condo project…now during the selling season. Rather than wait and hold, missing out on properties of a better size owned by sellers with similar motivation. You are not taking a loss – you are moving future equity to a property better suited for your needs.

2 bedroom 2 bath 1,100 square foot condo with river-frontage $14,000 price reduction...asking $115,000

Seller will need to spend over $200,000 to buy the next property, but will save 25-30% over what that sold for in 2005 so will not look at this as a loss - rather a trade in equity for a more suitable size for his needs.

MLS#2790395- searchable web site www.alpinelakes.com

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Glenn Roberts

Retired - Seattle, WA

Future equity is good. The time for a person/family to move is when their needs change. Speculator can try to time the market. People need to move on, and the promise of future equity in a large property should be just right for these folks.

Jul 25, 2010 02:48 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Glenn, many have said it in different ways but the bottom line is you can't time the market perfectly, so you best bet in a down market is to buy when you sell...you are no worse off and in time history proves property values rise again (in a normal cycle).

Jul 25, 2010 02:54 AM

Michael J. Perry

KW Elite - Lancaster, PA

Lancaster, PA Relo Specialist

Steve great job of clarifying the market we're in !!! I'll use this to help communicate today's reality !

Jul 25, 2010 03:04 AM

Monique Combs

Royal Shell Real Estate - Bonita Springs, FL

Royal Shell Real Estate - Monique Combs

Steve ~ Well said. I also tell clients the same if selling and buying..

Jul 25, 2010 03:04 AM

Joe Pryor

The Virtual Real Estate Team - Oklahoma City, OK

REALTOR® - Oklahoma Investment Properties

A dollar today is worth more than a dollar tomorrow. One of the first things you learn in CCIM.

Jul 25, 2010 03:41 AM

Terry Chenier

Homelife Glenayre Realty - Mission, BC

Steve,

I've telling people this for some time now. If everything is down say 15%, moving up, the savings are greater.

Jul 25, 2010 03:50 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Joe...I love it when the history channel talks about ship building, or gold discovery...when they equate the value in toady's dollars it sounds astounding. They found a million dollars worth of Gold in such and such mine in California back in 1830...which would be worth a 100 million now!! (talk about inflation).

Jul 25, 2010 03:51 AM

Gary Woltal

Keller Williams Realty - Flower Mound, TX

Assoc. Broker Realtor SFR Dallas Ft. Worth

Steve, however in a move down or move to a rental it is a loss.

Jul 25, 2010 03:52 AM

Speed Equity® Mortgage Acceleration System

Speed Equity® - Olympia, WA

We help your clients Own Their Homes Years Sooner

I think you make a good point Steve. Too many times people focus on their own circumstances when selling a home instead of looking at the big picture - that the home they are buying is also being affected by the real estate market.

Jul 25, 2010 04:52 AM

Brent Wells

The LivingWell Team - Prosper, TX

Dallas - Fort Worth

Steve: Honest, straight-forward, and clear. Thats how you explain the price reduction, but how it impacts the big picture of moving up. Nicely done.

Jul 25, 2010 05:21 AM

Lesley Wagstaff

Re/Max Results Realty in Vancouver, BC - Coquitlam, BC

For Real Estate and Mortgages

Very true, once the clients finally figure this out, they realize it is a good move. It is getting them to understand sometimes that is the difficult part.

Jul 25, 2010 06:27 AM

Charles Edwards Bentonville

Coldwell Banker Harris McHaney & Faucette 479-253-3796 - Bentonville, AR

AR REALTOR, Bentonville Real Estate Agent and Broker

Good logic Steve. I hope it causes a HUGE wave of price reductions from the White Mtns all the way to northwest arkansas!

Jul 25, 2010 06:35 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Brent, the should have, could have and would haves...have no place in this market, move on and buy right on the next deal, you'll be fine and it's better to look forward than back anyway. That has to be the message at this point I can't think of a better one.

Jul 25, 2010 06:42 AM

Norma Toering Broker for Palos Verdes and Beach Cities

Charlemagne International Properties - Rancho Palos Verdes, CA

Palos Verdes Luxury Homes in L.A.

Moving within the same market area, especially if they are moving up to a home better suited their needs, is a smart move. I have a client whose home is now worth 15% less, but the area he wants to transfer his equity to has dropped 15 to 20% too.

Jul 25, 2010 07:13 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Norma, it's great to have buyers at any price, and more time than not one deal will lead to more...we just have to get past the bottom so the climb can start anew.

Jul 25, 2010 07:30 AM

Bob Engert

Georgia Elite Realty - Marietta, GA

I make this point all the time. Doesn't always click, though!

Especially like your red highlighted line. Indisputably logical.

Thanks for contributing!

Jul 25, 2010 07:47 AM

Bill Travis

Captain Bill Realty, LLC - Gilbert, AZ

Broker/Owner

Makes sense to me Steve.

Jul 25, 2010 07:58 AM

1~Judi Barrett

Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK

BS Ed, Integrity Real Estate Services -IDABEL OK

Selling and Buying in the same market should not be a concern. It's only in a rapidly changing market that they might get caught off guard. If they've already picked out the property they want, they should be motivated sellers too.

Jul 25, 2010 11:05 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

Judi...People only get caught when they sell low and wait to buy...high. Our job is to make sure they know we are looking out their best interest.

Jul 25, 2010 11:56 AM

Nick T Pappas

Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL

Madison & Huntsville Alabama Real Estate Resource

Steve, guess you don't need me to weigh in on this, but yes the future equity thing makes a lot of sense and I have a couple of sellers/buyers who understand that concept and of selling and buying in this market.

Jul 26, 2010 07:23 AM