Myles of Investments

Read about my successes and failures. Learn from my experiences and gain insight without losing any cash!!!

Lesson: Catching a Falling Knife
Lesson: Currency Exchange
Lesson: Mutual Fund
Lesson: Paid to Wait
Lesson: Pricing in a Downturn

This is where you’ll find find my Blog. I will comment on the latest news relating to investing, real estate, and the financial markets.

Lesson: Real estate Pricing in a Downturn

Here is a lesson that I learned the hard way! I learned about pricing real estate when the market is changing from a booming to sliding, quickly. I had planned to list my condo for sale in about a month, and needed the time to complete some upgrades, as it was a total gut when I bought it, and we has a few finishing touches remaining. In two weeks from that time, the market had shifted from a strong sellers market, and quickly transitioned into a strong buyers market. The area had been flooded with listing, and the number of properties for sale had increased by 2000!

I made a few mistakes: First, I didn’t use all of my resources and energy to complete it as quickly. I worked at the same pace as usual, and figured that the real estate market was in a holding pattern. Well, of course none of us have the crystal ball, and you never know if the market will go up or down. I took a chance and lost, when I should have eliminated the chance and maximized my odds.

Next, when it was listed, I felt our realtor wanted to list it too low, and rather than getting a second opinion, or simply listening to my realtor’s instincts, we decided to list at a price higher than her recommendation. My realtor was an expert on the market and had her finger on the pulse of what was going on. She had sold other listings for us with great success, but in this case, we questioned her experience, and paid a great price!

Finally, as the market was sliding, I didn’t continue to price our place aggressively enough to stand out from the others who were also lowering their prices. We just kept dropping our price, but not enough to entice a buyer. The other listings were winning and we were losing. Pricing lower is one thing, but lowering to just above the market value as the market drops, still won’t sell your house, because it is still over market value! Take the initial hit to your ego and price competitively to sell immediately. By not pricing our unit properly from the beginning, and having trouble dropping the price enough to match the market, we were forced to reduce the price by almost $70,000 to sell! It is hard to say exactly how much potential money we lost by doing this, but it by pricing our place about $10,000 too high initially, we may have lost as much as $60,000 in potential gains, in the end. Let this be my expensive lesson to you!