House next door...

I'm not sure if I have mentioned this before, but the house next door to my house is for sale. It is part of the reason that I have listed my home. I thought it might make for a good investment opportunity for someone to own both homes. Except, I'm not really offering any sort of market discount to encourage this type of sale.

Anyways, the point of this blog posting is to update the status of the house next door. They have a new price. The owner has listed it at $239,000 from $249,000. I'm slightly disappointed by this as I would have preferred the base price for my hom to be higher, but there is very little I can do about the market. The thing I don't understand is the fact that I had approached the owner about a month ago and pretty much agreeing to pay about $230,000 in a private deal next year.

The reason this does not make sense for the guy is the fact that real estate commissions are going to eat away at his profits. Realistically, he will have to settle for about $230,000 and then he will lose 5% on commissions. Essentially, he will walk away with only $218,500. This will be in addition to any adjustments and legal fees he incurs.

This guy does not know business. If the house does not sell during the listing period, I think I know what kind of price I will be able to offer him when I am prepared to purchase. In fact, I've seen a couple of more places that would be a prime investment. I'll discuss these later.