Lured by price? Better be careful.July 20, 2009
We’ve been hearing a lot lately about seemingly irresistible prices at some San Francisco (and Bay Area) developments. We won’t call them out by name, but we will offer up a bit of advice to those who are easily lured by ridiculously attractive pricing.
While it’s true that your purchase price is a very important part of acquiring real estate, it isn’t everything. Who cares how cheaply you scooped up a property… if you can’t sell it 5, 10, or 15 years from now because it isn’t appealing to the market, your “investment” serves you no good. Desirability is the name of the game. You’re better off investing in a home that people will find absolutely irresistible when you’re the seller, rather than thinking strictly in terms of price and discounts.
It’s true, even in today’s down market, you may end up competing for those special homes. But you’re buying a little extra insurance that when you one day become the seller, you’ll have a liquid asset that others will be crawling over each other to buy. And as a seller, there’s no better position to find yourself in.
So while you may run across those “builder closeouts”, “slashed prices”, and “everything must go” sales, keep in mind that there is a reason those properties are having to resort to such aggressive sales tactics. It’s because no one wants them! And the only card the seller has left to play is to drastically reduce the price, lure someone in, and sell them an illiquid piece of crap. Beware when you see these words in real estate advertising. If you’re going to be lured by anything, be lured by quality homes in quality locations. Good luck out there.
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