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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Rutgers who wrote (25822)	12/10/2004 8:10:40 PM
From: Doughboy	Respond to of 306849

Almost sounds too good to be true... While I admit to some dramatic license with my home-selling account, the numbers are accurate. I do think the market is a bit softer in Washington DC right now; that's why I wanted to get out while the getting was good. My sense was that buyers were a bit more hesitant to pull the trigger compared to this past Spring, and the only reason I was able to get my price was the builder was working backward from a completely speculative end price.("Well if I can sell the house for $3 million, I can pay $1 million for the land.") He didn't attempt to figure out what the land was actually worth and at what point he had surpassed any other potential bidders. It wasn't entirely irrational; as I said, he just sold a house for $1.8 million and my lot size was twice as big as that home's. So for 25% more upfront investment, he could net 100% more profit--assuming he was right on what the house would sell for a year from now. I just don't think he realized how risky this bet is. As for the contract, it's pretty airtight. As I said, it has no contingencies or warranties, so even if the county decides to pave a highway across the living room, I'm not sure he'd have any recourse against me. He took the title as is. Actually I was the one who wanted to delay closing a bit; I am going to try to do this as a 1031 exchange, so I need the time to find a suitable exchange property. A fast closing would not have facilitated that. It's a risk that he may get cold feet, but I figure at worst I take his downpayment and sell it again in the Spring. I still have a 2 BR condo in Washington, which is easy to rent out and that seems to be appreciating even faster. So I have not left the RE market, I've just diversified it geographically. I'm a little uncertain about the wisdom of this, but for tax reasons, I can't cash out. Doughboy.