How long does it take to sell real estate in a traditional market? It varies. But how many times has it taken years, multiple listings, multiple real estate agents, etc.
What are you losing by holding property for years for sale vs. selling it usually within 60 or less days?
If you own a piece of property that is priced at 1 million dollars and hold it for 5 years what did you lose?
- Listing prices have rarely increased over the years, so let’s assume there is no appreciation in value over those 5 years.
- Also, we are not considering property taxes and other expenses.
- Let’s assume you could have earned 10% return on your money. Over five years that is $500,000.00. If you use 6% then it’s $300,000.00. This is what you are potentially losing.
- Now let’s assume you sold it quickly for $800,000.00 and that you could receive 6% or even 10% on other investments a year.
- At 6% the total is $240,000.00 and at 10% the total is $400,000.00 over 5 years.
- So how did you come out. Quick Sale + 6%= 1,040,000.00 and 10% $1,200,000.00
- Sure, you could earn less but depending on how you invest, you could earn much more.
- Either way you come out better by selling quick.
One of the most important facts is no one knows what the property is really worth. At auction the property usually has multiple bidders competing for the property and it brings the listing price of 1 million or even much more. We have sold property multiple times for more than what it would have been listed for on the traditional market. In fact, for desirable property auctions are the best way to determine actual value.