WARNING: This horrific lesson is learned from a true story
There’s a fine line between profiting from property and losing it ALL. Venturing into real estate does come with risk, after all.
But there are ways to safeguard yourself against this risk.
These safeguards aren’t obvious, but you can learn from a close friend of mine who came very close to a homeless horror story when searching for property profits…
As you can imagine, he was a nervous wreck. This buddy of mine is a middle-class, married man in his mid-30s. He has a stable job with a good salary and owns a home.
But in the process of upgrading into a bigger house where he plans on raising a family, he and his wife were almost left without any home at all when the unforgiving nature of real estate reared its ugly head.
Let’s call this friend of mine Steve.
Steve, who lives in Detroit, Michigan, recently found a great house that he and his wife wanted to move into after looking around for a few days. They toured the home, spoke with a real estate agent, and even talked with the owners.
As it always does, the conversation eventually turned to price.
And here’s where Steve began falling into a trap…
Without giving too much information out by way of specifics, let’s say that the owners of the home listed an asking price of $250,000. Well, when Steve and his wife discussed the price with the owners, they found out that the owners had begun receiving offers already that were right up to the asking price.
In the interest of getting the deal done quickly, Steve asked the owners about offering $5,000 more and closing the deal quickly. By all accounts, the owners loved and agreed to the idea.
Now, with the current market being the way it is, Steve was looking to move quickly. So over that weekend, he and his wife made the offer on the house as agreed and then listed their own home for sale.
On Monday, Steve and his wife began receiving offers for their home. Thinking that they were all set to close on the larger house, they very nearly accepted a fantastic offer from a couple who wanted to move in very soon.
At the last minute, Steve and his wife decided to wait, and thank goodness they did.
To their amazement, their offer to purchase the new home was rejected, and communication from the owners of that house stopped.
Steve realized that he and his wife were being used as leverage to attract a bigger offer.
So because of a phantom deal they thought was a sure thing, they were incredibly close to selling their current home to someone who needed to move in ASAP, which would have left them without any home at all!
Imagine the people who aren’t so lucky…
The trap here, which was certainly exacerbated by Steve’s eagerness, all stemmed from the fact that other people are only ever acting out of their own interests.
So the next time you enter the world of real estate, make sure the contracts are signed before taking the next step. Without patience, you could end up homeless just as Steve almost did…
