The "Instant Equity!" Scam
I’m sorry, but as I look through the real estate market, there is something that really irks me about the misleading things sellers like to say about their homes. Let’s take a home that is on the market for $150,000. The seller says that the recent assessment of the home’s value was $180,000, so if you buy it, then you will have $30,000 “instant equity”!
Now, think about this: A home is only worth what a buyer is willing to pay for it. If I am willing to fork out $150,000 and nobody else is willing to fork out more than that, then guess what? The home is only worth $150,000 and there is NO “instant equity.” I could turn around and immediately try to re-sell the house, but I will probably only get that same amount or less for it – unless I fix it up, wait several years (and hope the neighborhood appreciates), or try the same stupid misleading tactics of telling potential buyers that they will have instant equity.
A home is NOT worth what your municipality tells you it is worth. That might be an educated guess (some more educated than others, I’m sure) based on the recent sales of comparable homes in the area. But ultimately, a home is only worth what the buyer actually pays for it.