wow- an eye opener (Sherman: sales, real estate market, home sales)

[brandnewtexan]

"read a story somewhere that mr x built a house in 1980 for 100,000. house was sold 6-7 times during 1980-2010 and every owner added 6% to the asking price to cover realtor's commission... it was sold for 700,000 in 2010 by then almost 100,000 of the hike in price was due to commission money adding up. mind boggling!"zillow advice post

I did some simple math about this property and wow ...


6% means 6000 on every 100,000 so if it does add up. so, if house sales were like this :

1980 : 150,000 commission: 9,000
1985: 200,000 commission : 12,000
1990: 300,000 commission: 18,000,
1995: 500,000 commission: 30,000
2000: 650,000 commission: 39,000
2005 : 680,000 commission: 40,800
2010: 700,000 commission: 42,000

commission : 198,800
selling price - commission : 700,000-198,800= 501200

[emilymail]

wow indeed!
actual cost of bulding was 100,000
commissions were 200,000
real price with 20 year inflation 500,000
commissions brought it to 700,000
wow indeed!

[loves2read]

the HOUSE did not sell for that price--
the LAND sold for that price--
and I bet the house was torn down and rebuilt at least one in that process

show me the house is what I would ask--
if the story is out there and is real--then the house must be too

[ExcellentUserName]

Originally Posted by loves2read

the HOUSE did not sell for that price--
the LAND sold for that price--
and I bet the house was torn down and rebuilt at least one in that process

show me the house is what I would ask--
if the story is out there and is real--then the house must be too

I am happy to hear someone making this point. Houses dont gain value as a rule. Prices inflate, but living in a home and making it less new does not make the structure more valuable. Real increases in value of a home/land combo generally always comes from the land.

[brandnewtexan]

there was no pic or mls number but i'm sure that every owner spent money and did some remodeling. regardless, commissions add up to 200k and 6% formula applies to every house sold a few times during its life span. it is a lot of money.

[ggolf]

Real Estate is only worth what someone is willing to pay for it. My ex and I bought a house in 1996 in Boston for 650 (which I thought was too much), then got divorced a year later and sold it for 800. It's all stupid.
I just bought a house in Sherman that was appraised at 250, for 175. It's like the Superman comics' "World of Bizzarro".
Everything is upside down now, it's crazy.
There was an article in the Dullass Morning News today that talked about how many houses are owned by the banks and that they would be forcing them on the market for the next 3-5 years, causing the existing home sales and prices to drop. Not sure I made the best decision to buy my house?
Well, a hundred years from now, it won't matter.

[momof2dfw]

Originally Posted by brandnewtexan

"read a story somewhere that mr x built a house in 1980 for 100,000. house was sold 6-7 times during 1980-2010 and every owner added 6% to the asking price to cover realtor's commission... it was sold for 700,000 in 2010 by then almost 100,000 of the hike in price was due to commission money adding up. mind boggling!"zillow advice post

I did some simple math about this property and wow ...


6% means 6000 on every 100,000 so if it does add up. so, if house sales were like this :

1980 : 150,000 commission: 9,000
1985: 200,000 commission : 12,000
1990: 300,000 commission: 18,000,
1995: 500,000 commission: 30,000
2000: 650,000 commission: 39,000
2005 : 680,000 commission: 40,800
2010: 700,000 commission: 42,000

commission : 198,800
selling price - commission : 700,000-198,800= 501200

Originally Posted by brandnewtexan

there was no pic or mls number but i'm sure that every owner spent money and did some remodeling. regardless, commissions add up to 200k and 6% formula applies to every house sold a few times during its life span. it is a lot of money.

Where exactly was this amazing house located? What city? Subdivision? Size?

This does NOT hold true for most properties at all!!!!!!!!!! In fact, very VERY few houses would even see such an increase in value unless they were in a VERY desirable area and the property itself was in an ideal location w/ in the area.

Oh, btw, Zillow is far from accurate, especially in Texas, and not all homeowners do any kind of updating or remodeling. How do we know for a fact that every single owner automatically added in 6% to cover the costs of commissions? Does the article quote every single previous owner? Please post a link to this article.

[loves2read]

yes--still waiting to get the MLS info for that house--
urban legend IMO
won't believe something like that without some specific proof of buy/sell prices
and Zillow might work in some areas but not in TX--for the umteeth time--
so anything someone posts with the caveat that "Zillow says"-- I just ignore as hype

IF Zillow really understood the Texas real estate market it would post info with disclaimers like
this is the appraised value of the home based on public record but may/may not reflect market price

[momof2dfw]

Originally Posted by brandnewtexan

"read a story somewhere

Originally Posted by loves2read

yes--still waiting to get the MLS info for that house--
urban legend IMO

LOL!!! You know, if I'd read a story somewhere I'd somewhat remember where I read it. Especially if it was important enough for me to remember it and start a whole new thread about it, lol. Even if you google it again it should be highlighted for the links you have visited and could find it and link it here to prove it's accuracy. If not........ it's all "urban legend" or hearsay and does not apply to 99.9% of the real estate in this city, state or country.