Nashville Realtor for Home Buyers, Sellers or Commercial Property Leasing . . . . . TN License #290760

So we all want a deal. When we are buyers we want to get our new home for a song. When we are sellers, we want to sell our home for an arm and a leg. But wait! With the internet, social media and established media, Zillow.com and other real estate sites, news travels fast so there are no (or very few) uninformed people anymore. Most buyers surf the net for weeks, sometimes months before they buy and sellers get CMAs (comparative market analyses) and sometimes appraisals before they put their homes on the market. So who are we fooling?

We have to remember that the price of a house is based on what a prudent buyer will pay for the value they see in a house and they base that value on other homes in the neighborhood. Most informed buyers use a buyer’s agent to help them negotiate a contract and most informed sellers use a listing agent to sell their homes. So we need to engage reason in what we will accept and pay for real estate.

No one wants to pay too much or to accept too little for their homes.

Let’s engage reason and balance when we approach the real estate market. Buyer agents know the market and so do Listing agents. We provide balance by providing information that can save buyers and sellers grief that comes when they negotiate without knowledge of the relevant statistics that we have. I like the old adage” Knowledge is power.” It is relevant here.

Too often I find sellers who have  refinanced their mortgages and have taken some cash from the transaction simultaneously.

Sometimes this can have negative results.  If cash taken turns out to be based on an inflated appraisal of value,  homeowners may find that they owe more than the house is worth. Hence the need for a short sale should they need to sell.

Refinancing can be a good thing, especially with low interest rates these days. However, homeowners should understand that the offer to get cash from the transaction serves to increase the remaining balance on your mortgage and it reduces your equity in the property. So when you go to sell you take away less cash from the closing table and there may be cases where you may even need to take cash to the closing table.

Refinancing and Home equity lines of credit sound like good things but  everything that sounds too good to be true should be examined carefully. Do you really need that cash now? Was cash the reason for refinancing? Do you want to reduce your debt?

You don’t want to eat the icing off your cake then try to sell the cake and get paid for the icing too.