I know the title sounds like an infomercial but believe me it was true. We first met “Steven” (name has been changed to protect identity) about 8 months ago and showed him and his wife various oceanfront properties to purchase. We found them a perfect unit and begun the negotiations. Even though “Steven” was an all cash Buyer we were not able to secure the deal for him as the Sellers were just stubborn on their price. So Steven and his wife decided to put their purchasing on hold. They told us they would wait until the season begins and then look again. We never lost touch, and being the type of Realtors that we are, we gave our Buyers space, but still closely monitored activity in the building that our Buyer had decided on.
Then came the first week of September: Suddenly the same unit that our Buyers had fallen in love with came on the market on a couple of floors lower than then the one we had previously bid on. Excited we called “Steven” and told him the great news. We explained that they had a contract on the property but the deal fell through because of financing. Our Buyer, exclaimed “I’ll pay all cash and I will close in a week!!!”
We approached the Selling Agent prepared a contract, negotiated well and got the offer accepted. Since our Buyer had committed to a fast closing and all cash deal, he decided instead of the $100,000 deposit the contract had stipulated, he would rather pull his money out of the stock market and pay for everything in one shot.
So that fateful day, when we went to pick up the deposit check instead of it being written out for $100,000 it was written out for the total purchase price of $1.4 million. We were shocked. Our Buyer explained that this was money he had very heavily leveraged in financial stocks and since they were all not doing well maybe better to invest in Real Estate.
We understood where he was coming from but little did any of us know the money he had pulled out of the stock market, had he left it there until the following week which was the closing week, would have all but disappeared when one of his largest positions went under.
Thus in essence, purchasing this oceanfront condo saved him over a Million Dollars!!!
The “reality” of Real Estate is that it has gone down over the past few years and there are a lot of people that have taken huge losses as they have seen the value of their properties plummet 10-30% over the past 12-18 months. However their investments have not disappeared overnight as they have in the stock market. Many people have literally lost millions in one day on the stock market.
Real Estate is at one of its all time lows here in South Florida. There are some really good deals and bargains to be found and places where people can really get value for their money. For me it is an obvious choice of investment given the current volatility of the stock market.
By the way as a Caveat to this story, the unit that “Steven” ultimately purchased was purchased at a price way lower than the original offer we made on the unit a couple of floors above. Believe me, fate is definitely a key ingredient in Real Estate.