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Shrunk the Net Worth Ole Bear, Editor, Commentary How I Made a Dollar [$1] in Real EstateThe linked essay makes some observations about manias and the historical NASDOG bubble in tech stocks. I can remember Mom Alice telling me she had some JDSU and it was $300 a share. I told her to sell it. She didn't listen. Oh, well! Women are generally the ones that influence the decision for the family to purchase the new home. Features such as kitchens, baths, master bedrooms, and extra accouterments [amenities], as well as good space for the kiddies including play areas, are generally the factors, besides location, safety of the neighborhood, and convenience to the lady of the house's errands for the main incentives to sign on the dotted line for the new Bear Cave. That's one of the reasons that women have been generally successful as Realtors, Brokers, and Salespeople, because they well understand Momma Bear and the how's and why's Momma Bear likes her special cave. Manias are generally driven on human emotion to get rich quick. Take Tulips in Holland, the stock market of the 1920s, the recent tech stock market bubble, or single family real estate. Even with the mania effect in the marketplace currently for purchasing real estate, the purchase of a home or liquidation of a property is an emotional experience. Why? It is a decision making process that effects families -- putting together a new family, divorce, death in the family [dealing with an estate], purchasing the move up home for the growing family, or downsizing to a smaller home or condo in the case of the older population who don't want to take care of the Taj Mahal anymore. This even includes corporate relocation to another part of the same city or across the country to a new town. When one adds the feeding frenzy mania to the existing emotional facets of dealing with single family real estate touting by the news media, CNBC [Bubblevision], magazines, and newspapers, as well as the statistics put out about how much folks are going to make buying a house, the whole process even becomes more complex. There are ways folks can protect themselves in purchasing a new home or disposing of an old one. Get a professional building inspection by someone qualified of the property so that you know what you are buying or selling. Get a survey, or have the corners of the site marked so that you know where your lot lines are. Read over the seller's disclosure statement. Look at competing properties on the market. Ask to see actual comparable sales of similar properties that have sold in the neighborhood and competing neighborhoods. When selling a property, have the Realtor prepare a competitive market analysis of the property based on sales, expired listings, and competing listings. Get a presale realty valuation of the property before placing it on the market, or making an offer. If you make an offer to purchase, make sure that the property has to at least appraise for the sales contract price. Have your attorney look over purchase offers on the property before you buy or sell. Use real estate related transaction folks who have established reputations for honesty and integrity in that particular micro realty market. These types of things will cost you money up front, and you may even walk from the real estate deal when you really know all of the facts. I have done this countless times to remove the emotion out of the real estate transaction for both residential and small income properties -- even though I spent money up-front -- the input this type of research provided -- effected prudent investing. Everyone has to live someplace. Having an affordable, cozy Bear Cave that you can live in and love is the main thing, no matter what happens in the real estate mania. Although real estate is touted as a piggy bank you can refinance every year because it is going up in price, having the Bear Cave paid for or having a low loan to equity [property value or retail price] are added insurance to weather any storm, should one have to find another Bear Cave. To live within one's means -- is a good thing. Yours Truly, © 2005 Realty Reality |
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