Here we go again. How come when everything is spiraling downward with the real estate industry, the belief was that the real estate market was never going to recover. Then, when things finally start improving, all of the risk suddenly disappears! For the past six years, across this great land, the cry from sellers went: ” If only the market would get better so I could sell my home and get on with my life.” Now, that the market has created an ideal window of opportunity for sellers to receive fair and reasonable offers, the tune has changed. The “if only” plea has been replaced with: “I think I’m going to hold out for a much better price.” How does that make sense? What happened to the valid concerns about all of the risks associated with selling property? Did they suddenly disappear?
There is an old, rather blunt expression that states: “pigs get fat, hogs get slaughtered!” In other words, it’s okay to want your fair share, but when you get greedy and want more, that’s when you get blindsided and you lose it all. When it comes to making important decisions, it has always been important to manage risk by carefully considering the “what if’s” that are associated with the outcome. As a refresher for sellers with short memories, who now believe there is nowhere for prices to go but up, you may want to take a look at the risk that both real estate and the economy as a whole, still face. Consider the following “what if’s” or “is it possible’s”:
ü What if- Political gridlock in Washington doesn’t improve, and drags down the economy, how will that affect the future price of my home?
ü What if- The deficit continues to spiral out of control and eventually reaches $20 Trillion, how will that affect the future price of my home?
ü What if- The Recovery doesn’t last and I miss the window of opportunity to sell now, how will that affect the value of my home?
ü What if – The deep concerns about The Fed’s spending policies are valid and inflation does spiral out of control, will I be satisfied with the price I’m able to get after that happens?
ü What if – The distressed property clean-up takes several more years to be resolved, how will that affect my plans to sell?
ü What if – Interest Rates as they inevitably should, begin to rise, how will that impact the number of buyers that can purchase my home in the future?
ü What if – The Stock Market suffers another major correction, how will that impact the motivation of buyers to want my house?
ü What if – Income taxes increase to their previous high levels and significantly impact the confidence of wealthy individuals that may want to buy my home, how will that situation impact my ability to sell?
ü What if- The capital gains tax rate is modified to reflect the same rate as the tax rate on income, how much could that impact the price of my home?
ü What if- The problems in Europe and especially Greece, continue to linger, or even get worse, how could that impact my ability to get more for my home?
ü What if – We have another major confrontation in the Middle East, such as in Syria, how will that impact potential buyer’s motivation to purchase my home?
ü What if – The threats that North Korea is making regarding a nuclear attack, aren’t just threats, and we have an international incident, how will that impact my ability to sell and my selling price?
ü What if – A weather event such as another hurricane occurs later this year, (we’ve all learned to never say never), how could that affect the prices of real estate?
ü What if – Something changes with my personal life, and I get sick, or perhaps a loved one gets sick, does it make sense for me to continue to sacrifice the best years of my life for a little extra money?
ü What if – Warren Buffet is right, and the time to sell is when everybody else is buying, what will happen if I ignore the Oracle of Omaha’s sage advice and decide to press my luck?
I think you get the picture. If you don’t consider all of the possibilities, your decision could be flawed. You must make decisions made regarding money objectively with great consideration given to the risks of waiting for things to get even better. These risk should be weighed carefully against the financial benefits of waiting. Even more importantly, the loss of the emotional benefits associated with the quality of your life, should be given the highest priority as none of us know how much time we really have to enjoy the quality of our own and our families lives.