“…You guys need to spend more time buying and selling houses…”
Got an answer to the math problem? This is powerful stuff! It’s very important to understand if you want to invest.
Anybody got an answer? Nvrmnd has 10 posts since I posed the question, but has disappeared from this thread.
My point is this: It’s a very simplistic math problem, and if you can’t solve it…you might want to reconsider investing (you could lose BIG TIME). Moreover, those seeking advice might want to reconsider whom they choose to listen to.
Oh, alright. This is a simple time value of money problem:
FV = $230k
I = 15%
N = 24
PV = $185k, so avoid the risk and take the cash today, since you effectively gain nothing by holding for 2 years…that’s making certain assumptions, which I think you implied.
Anyway, shall we go do some deals now?
Money is worth 15%.
What exactly do you mean? Do you mean per annum appreciation rate? Something else?
Thanks.
“Anyway, shall we go do some deals now?”
Yuppers!!! :bigthumbup:
It was a “simple time value of money problem.”
And I can guarantee you if those who were bashing Real Estate Agents had known how to solve it…they would have (I think I made my point).
That’s a very valuable & useful formula…
…time to move on.
Personally, after reading this thread, too much of it is childish insults and/or bashes. How about you stick to real estate related things, and leave the insults elsewhere. If you all want to do this immature insult stuff, maybe try IM’s or E mail.
My apologies for this post, but threads like this are out of line and unnecessary. There were too many points made by using insults, instead of just sticking to facts and opinions. These forums are exceptional, and for the most part, professional. Let’s keep it that way. Again, sorry about this post, but enough is enough.
Regards, Tony.
Info,
You’ve answered many questions but still not addressed, as far as I can see, the questions of the same commission % on different valued homes. Are you saying that selling a $100,000 house and a $1,000,000 home actually takes $54,000 more worth of work to sell? This, I think, is one of if not THE biggest complaint against the profession. You do provide a valuable service, but if you can justify to me how an agent deserves an extra $54,000 in commissions (yes, yes, divided among serveral groups I know) for, as far as I can see, similar amounts of work to sell, I’d like to hear it.
aquollie-
I appreciate the opportunity, and I’ll try to be brief.
Real Estate Sales is a much more difficult profession to succeed at than some would have us believe (most who attempt don’t make it). It takes many years of accumulated experience, and education to have the competency to sell upper end real estate. I’ve seen lower end properties priced significantly below market…can you imagine the potential loss if a $1,000,000 house were marketed incorrectly? (feasibly the loss could be in the six figure range).
Additionally, million dollar homes have a much smaller pool of potential purchasers with the financial wherewithall to afford such properties. The marketing, and advertising is unique, and more expensive to get the word out. And the market times of luxury estates will be significantly longer & take up much more of an Agents valuable time (= money). There are other expenses as well (B&O based on commission right off the top of my head).
Moreover (and significantly important), we live in an EXTREMELY litiguous society. President Bush said it quite simplistically, “Americans sue each other too much” (if the medical profession gets some relief as a result of tort reform…who do you think the lawyers will come after next? I Hope tort reform brings us all some mollification).
So I’d say it’s a combination of knowledge & experience, costs & risk of liability.
-Infowell