The Business Pillar You Are Probably Overlooking

Performance Property Real Estate Question

Q: Gerald, we just finished renovating a home we are going to now sell. It took a lot longer to do the renovation than we thought and ended up costing a lot more money than we planned for also. We put it on the market to sell and have received several offers, but I need to make more to make up for my losses, so I’m thinking about holding out for a higher offer. What do you think? Reggie, Orange, NJ

A: Reggie, I have done many fix and flips so I understand where you’re coming from, however, you don’t get to decide how much money a buyer is going to pay for a property that you sell. The market ALWAYS decides the price a buyer will pay and to an extent the bank that lends the buyer mortgage money to buy the home also has a big say in the matter. It sucks when your costs are higher than you anticipated which is why you should also leave slack in your pre-deal analysis for unexpected costs, however at the end of the day, all the costs are sunk and cannot be recovered. Also, every day you own a property that isn’t generating income, you are effectively losing money because you are always paying for property taxes and other ongoing costs like insurance and utilities. It’s a bitter pill to take but you need to accept the highest purchase offer that was made, sell the property and move on. Good luck. Thanks for your question, Reggie.
For more real estate tips and information visit my blog at