When Do You Make Money?
People will often say they made money when they
sold their home. That sounds good but is it really an accurate statement?
Probably not. Here’s why.
A seller walks away from closing with whatever
“equity gain” (sales price minus original equity, sales expenses, loan
pay-down and loan pay-off) there is in the home. But how did that equity gain
(profit) get there in the first place? Smart Selling ?
No, smart Buying. Money is most
often made when a home is purchased, not when it is sold. In order to have an
equity gain at sale time there needs to have been a good investment to start
with. That can only happen at time of purchase.
Think about it. If you pay too much, buy in a
bad area, choose an unpopular floor plan or make any number of other mistakes
there will be little, if any, equity gain. Even in today’s strong home
selling market there are neighborhoods where the homes aren’t selling for
more than they did 20 years ago.
So, how do you determine that good investment?
A step in the right direction is to retain the services of an Accredited
Buyer’s Representative. These professionals have the expertise to
coach you through the home search and help you “Make Money” - in the
purchase.
First Published 3/19/01
