Two-thirds of the homeowners who call me to discuss moving end up staying put. Am I a bad “sales” person?
“Sell” has several definitions. Per the American Heritage Dictionary, it can suggest to give up or surrender in exchange for a price…or the more negative connotation: to take unfair advantage of, to betray the true trust or faith of.
This week I heard from a past client, a contractor, who had survived the foreclosure mess with the roof over his head and bank account intact. But he was concerned that we might be entering another “bubble,” and should he divest himself of his own home because it might drop in value?
First, I explained to him that he lives 20 miles from the center of the universe for technology (the Silicon Valley/San Francisco corridor) and that everything now and in the future will involve that technology, and greater minds than mine agree that technology is not a bubble. Things may slow a bit, but they will not reverse themselves. His home will not suffer the devaluation experienced in the foreclosure crisis. Lenders have placed more restrictions than ever on financing, and we shouldn’t ever again see the en masse defaults of 2007 through 2010. There will always be demand for property in his area.
He thought he should at least downsize to a smaller home. “And incur all the expense of a sale and purchase when you can afford the home you’re living in now?” No.
It’s OK to think of your residence as an investment…to a point. But, I told him, getting that house paid off and retiring without a mortgage payment should be your main consideration.
“What about renting?” he asked.
“And slug it out with all the tech workers and displaced support service providers who can’t afford to buy a home?” I said. And deal with greedy landlords who bump their rents up 10 to 20 percent a year? Or more? And have fewer tax write-offs? No.
My next “lost opportunity” was a young couple who had divorced but were still united in home ownership. And two children. After a few years of this cozy arrangement, she wanted out of the house so she could “maybe rent”…and be free to take the kids across the country, closer to her mother. She wanted him to buy her out or, if that weren’t possible, sell the home.
“Let’s see,” I said to him. “If you buy her out (which at today’s prices was not practical in his situation) or sell, your kids will disappear, right?”
“I guess,” he answered.
“Why would you want to do that?”
“That’s true,” he commented in his enlightened state of being.
If you don’t have a compelling reason to sell your home, you shouldn’t.
Another lost “sale.” But that does fall within the parameters of “fiduciary duty.”
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Cathy Turney has been a California licensed real estate broker (#01056789) since 1988, a state-certified appraiser (#AR008672), and wrote the American Business Association Stevie Award-winning book, Laugh Your Way to Real Estate Sales Success.