When we were kids, we knew nothing about real estate. The only thing we needed was a place to rest our head at the end of a long day and hopefully a neighborhood that had a lot of kids our age that we could play with.
I always thought that my first childhood home would be the house we would live in until I was old enough to move out and buy my own. I never knew the concept of moving from one house to another. Until I was 5 years old and my grandpa decided to sell is acreage.
When he sold his acreage, he taught me a great lesson about the importance of supply and demand in real estate.
The city of Edmonton had decided to expand the LRT system. A bridge needed to be built over top of my grandpa's acreage to help ease the driving traffic that would cross over the train line. There were about 8 to 10 houses plus a trailer park that were going to be affected.
What my grandpa did was quite simple, yet very smart. He simply waited it out until he was the last property that needed to be purchased by the city before they could go ahead with construction. He was the last person in line and by the end, his property was highest in demand. The result was that he ended up with way more than he would have, had he been the first in line to sell his land to the city. He also was given a house for next to nothing.
The rule of supply and demand is something that many home buyers and home sellers miscalculate on. Home sellers often think that their home is the only one of its kind in the area and should be priced as such,when it isn't necessarily true. And home buyers often think that there will always be another house exactly like the one they're interested in that they can get for a lower price, but that often is not the case either.
The best way to make sure that you don't make this mistake is to get the recent listing and sales data on the properties in your area before deciding how unique the property is. A qualified realtor will be able to help you out with getting that information presented in the correct way for you. This information in turn will aid you in making the best decision on pricing.
Next time, we'll finish up this series of "Common Sense Real Estate Lessons That My Grandparents Have Taught Me" by talking about my farmer Grandpa and what he taught me about maximizing your returns.