Winning in the Game of Real Estate
Your responsibility with regard to market conditions is to be flexible. Be ready and willing to move with the flow of the market. On a national scale, the market can change dramatically. During election years or during a terrorist crisis, the pendulum can swing spectacularly from a seller's market to a buyer's market. The threat of a spike in interest rates can create a swift turn from a buyer's market to a seller's market, as buyers make the decision to buy before rates actually soar.
In addition to national factors, many local factors can shift the market as well. Extreme weather conditions, a fire that destroys many homes in an area, a factory closing, or a new company moving to town can move the market unexpectedly. The development of a new subdivision or a moratorium on construction can also move the market in one direction or another.
Real estate is big business. It is a complex and ever-changing industry. You can learn what you need to know in just one book and yet take a whole lifetime of actually doing the work to perfect your skills. Amateurs play with professionals, and professionals play with other professionals. Sometimes, amateurs will play with other amateurs, a situation where no one really understands the process and trouble can be the name of the game.
Some real estate agents have a lot of experience, assist in making good decisions, and can help those sellers or buyers who are less experienced. Other agents are as inexperienced as any novice in the marketplace. They may know the rules from their schooling, but they don't know how to apply them. Real estate school helps agents learn the laws of the game—the rules and regulations attached to real estate. Learning how to artfully play the game comes from actually doing it. Just like any other sport, learning comes with practice. You can read all the books in the world about figure skating, but you will never know how to skate until you get out on the ice!
Most buyers and sellers are not as experienced at the game as real estate agents. Buyers also have a higher stake in it and commit to a long-term debt to acquire a home. Sellers commit to signing over their largest asset, a home, for what is hopefully the right amount of cash.
Buyers often enter and exit the game at will. They may change real estate agents to be sure they have a true professional on their side. Sellers often enter the game and wait. If the home doesn't sell, is it the market or has some other factor come into play? The more you learn about being a seller, the better chance you have of winning the game. The rules for winning include understanding the first-string players—namely market conditions—and being flexible about price. The second-string players are important too; they are condition, style, and marketing.
It is not a requirement to be in a win-lose situation. A win-win situation is always best, and there are plenty of them. In the best deals, no one feels taken advantage of because everyone feels good about the sale. Any problems that may arise can be handled easily and may not be looked on as problems at all.
The best news is that everyone can win in the game of real estate—and it's a game worth playing. It has traditionally been the best investment that people make. It has outperformed all other investments in the long run, including the stock market, and it has the added benefit of being one of the safest investments. This does not mean that you will always make money in real estate, but if you are willing to wait for the right conditions, you can.