Selling Real estate is a lot like selling stocks

The big advantage of investing and owning stocks over real estate is their liquidity. You need to sell some stocks to buy an undervalued piece of real estate? Simple, call your stockbroker or use your online trading service and as long as it's during trading hours, you can execute the trade pretty quickly and have the money put right into your account. Obviously much easier then selling some real estate for those funds.

Why? Despite what many people think, the price of a stock is traded on what buyers and sellers think that it is worth... Not the actual book value. If nobody's buying and everybody is selling, the price of the stock goes down and vice versa. Several factors contribute to what people think it is worth... the masters such as Carl Icahn and Warren Buffett have analysts that know what a company is worth (the book value) or may have better ideas to add value to a stock that may be undervalued due to several factors.

Whatever the reason, the buying and selling of stock is a very efficient system and is getting more and more efficient yearly. You can set programs for what you are looking for at what price such as book value in comparison to it's market price for example. As stated earlier, you can sell the stock within minutes at market value.

Key word: Market Value. If you own XYZ stock and the current market value is $50 a share and you think that it's worth $70 a share you are not going to sell it until that market price hits $70 and a buyer buys because they agree with you in the price. If you own XYZ stock with a current market value of $50 try selling it tomorrow for $70 and let me know how it goes.

You can certainly put in a sell order to sell when it does hit $70... and as we saw in the late 90's that could be a matter of minutes. Or... it could drop to $5 in a day as we saw when some of those great $200 dot com stocks with a book value of 50 cents went bust.

However, if you want to sell it right now, it does not matter what you might have read in Money Magazine or saw in the Chicago Tribune and think that it's worth.

The bottom line is that unless there is a buyer who thinks that the stock is worth the offering price, it's not going to sell. Just like real estate. Just watch a show like Fox Stocks or Neal Cavutto when he has different guest analysts on the show. Very rarely do they agree about which way a stock is going to go.

Ask three real estate brokers, and it won't be much of a surprise when you get three different home value estimates. That's for another day on why this is so.

Just taking a list of homes that recently sold within your area and averaging the price out to find the value of your home is much like taking the selling prices of Sprint, Nextel, Nokia and coming up with a price of what Motorola should be selling for.

There are just way too many factors for this to be an accurate analysis for a homes value, unless every single home is exactly the same... and even in that case, the actual real estate the home sits on is completely unique in character. Home #1 certainly can't be on the same lot as Home #3 and Home #2 may have no landscaping. Real Estate is unique in character and the three most important words in real estate also apply... Location, Location, Location.

The role of a stock broker is to execute the trade at the current seling price when you want to sell your stock right now. Now, while it's obviously a much different process then selling real estate, the role of a real estate broker when you list your home with them is to ultimately sell the home. Tell your stock broker to sell a stock right now for $70 when the current market price is $50 is not too much different then telling your real estate broker to sell a $500,000 home for $700,000.

Like any market, you need to have buyers and sellers to agree on a price. All real estate buyers have to do is read the paper to get a negative perception on the real estate market in Chicago. It's very unlikely that they are going to even visit your home if it's overpriced as much as my example above.... no matter how good the marketing is or who it is listed with. (It might have worked three years ago when the papers were reporting on How good the real estate market was.)

When the real estate market is in a normal state which we feel it is in for the Barrington area, pricing a home properly for the market is one of the most important factors in selling real estate. The #1 Real Estate broker is not going to sell it if it's extremely overpriced unless the price comes down to the current market value

No real estate brokerage controls the market. Selling the most real estate has a much different meaning then selling real estate for the most money possible in the shortest amount of time and that's also for another day.

Date: Thursday, May, 10th 2007 @ 12:31:11 AM
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