New Construction and the Question of Equity

Let’s talk about new construction and equity.

Developers and some agents often claim that as development prices rise, the difference between the price you paid and the new asking price becomes instant equity. Is this true?

The short answer is yes. Equity is the market value minus the debt of the property. However, market value changes.

For example, consider the actual sales price of your purchase.

What are the current prices in the area? Do they support the sale price and the expectations set by the agent and developer?

If your intention is to sell once the project is completed, you should be well-informed about current comparables and market trends. And the actual value of your new property… that may surprise you.

That’s why relying on a realtor who provides data and analysis, not just someone who shows you available properties, is crucial.

Looking to buy or sell? Let’s talk… give us a time to discuss your real estate plans. Visit YouBetterCallMe.com.

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