I realize there are many answers to real estate questions, and I value everyone's opinion. I'm sure many of those answers come from valuable research and facts. I try very hard to include that information, too.
But I want you to understand something. The best answers I can give you won't always come from statistics, although I'll share those with you as well.
You see, I'm not just answering these questions. I've lived a lot of them. I've watched them play out over more than 30 years in real estate.
And although I may change the names, my stories are real. The people who lived them with me are real, too.
My hope is that when you read my answers, you're not just getting facts and figures. You're getting something a little different. You're getting a living, breathing answer from someone who was actually there.
Is Now a Good Time to Sell My Cabin in Gatlinburg, Pigeon Forge, or Sevierville, or Should I Wait?
Yes, it's a good time to sell your cabin. And yes, it might be a good time to wait.
Lol. Now, I know that sounds like I'm trying to have it both ways, but hang with me.
If your cabin has gone up considerably in value, you've got an opportunity to walk away with a good profit, and selling makes sense for your family, then absolutely, it might be a wonderful time to sell.
But if prices are down, your cabin is producing good rental income, and you can comfortably afford to keep it, waiting might make more sense.
Here's the problem. Nobody knows exactly what the real estate market is going to do tomorrow, next year, or five years from now.
And there's something else I want you to consider.
Sometimes the question isn't whether your cabin will be worth more tomorrow. It's whether you can afford to wait and find out.
I've spent more than 30 years selling real estate here in the Smoky Mountains, and I have a story that explains why I feel so strongly about that.
But first, let's talk about something we all understand.
Sometimes real estate reminds me of a casino
Now, don't get me wrong. I'm not saying buying and selling real estate is the same thing as gambling.
There's a lot of research, experience, and good judgment that goes into making a real estate investment.
But when you start depending on something you can't predict, you can get yourself into a situation that feels an awful lot like sitting in front of a slot machine.
Think about it.
You've been playing that machine for a while, and things aren't going your way.
You're losing money.
But you keep thinking, "Surely it's going to pay off. I've put too much into it for it not to."
So you keep feeding it.
And feeding it.
And before long, you're spending money you really couldn't afford to lose.
Now, maybe the machine eventually pays off.
And maybe it doesn't.
But here's what concerns me.
If you're holding on to a rental cabin that's costing you money every month, and your family is struggling financially because of it, you need to ask yourself whether you're making an investment decision or simply hoping things will change.
Because those are two different things.
And the opposite can be true, too.
Maybe you're sitting at that same machine, and you've just hit a pretty good jackpot.
You've got more money sitting in front of you than you ever expected to win.
Now what?
Do you cash in?
Or do you keep playing because you think the next jackpot might be even bigger?
Well, I can tell you something.
The casino would probably love for you to keep playing.
Lol.
And that brings me to a cabin I sold here in the Smoky Mountains.
The man who turned $400,000 into an opportunity worth over a million
I had a seller who had purchased a cabin for somewhere around $400,000.
He'd owned it for approximately three years.
And during those years, the real estate market had gotten extremely strong.
Cabins were selling for prices that would have seemed almost unbelievable just a few years earlier.
Well, this particular seller had made up his mind.
He told me, "Will, I'm not selling that cabin until I get at least $1.2 million for it."
Now, I understood where he was coming from.
He'd bought the property at a good time, the market had gone up, and he wanted to make as much money as he could.
Nothing wrong with that.
But I had done my research.
I had looked at the comparable sales, the market conditions, and what buyers were paying for similar properties.
And I told him something along these lines.
"Listen, I believe your cabin is probably worth somewhere around $900,000 in today's market. That's what the numbers are telling me."
Now, that didn't mean we couldn't ask for more.
And it didn't mean somebody couldn't offer more.
But there was another problem we needed to think about.
Most buyers purchasing properties like his were going to need financing. And a lender wasn't necessarily going to agree that the cabin was worth whatever somebody offered.
That's where an appraisal comes into play.
And I was concerned that even if somebody offered him $1.2 million, the appraisal might not support that price.
Well, wouldn't you know it?
We got an offer.
And it was a mighty good one.
A $1.1 million offer. And he said no.
That's right.
Somebody offered approximately $1.1 million for his cabin.
Remember, he'd paid around $400,000 just three years earlier.
Now, that wasn't all profit. There are selling expenses, financing costs, taxes, and other things that have to be considered.
But good gracious, that's a tremendous increase in value in a relatively short period of time.
And you know what my seller said?
"No. I'm not taking it."
He wanted $1.2 million.
Now, I understand wanting to get every dollar you can out of a piece of property.
That's part of my job as a real estate agent, helping sellers get the best possible outcome.
But I also believe it's my responsibility to explain the risks.
And I told him something I genuinely believed.
"If you were somebody who bought and sold property for a living, and you had an opportunity to make this kind of return in three years, you'd probably jerk somebody's arm off trying to take it."
Lol.
I wasn't trying to tell him what to do.
It was his cabin.
His investment.
His decision.
But I wanted him to understand something.
We were in a very strong market. He had an excellent offer in front of him. And the numbers I was seeing didn't necessarily support the price he wanted.
Could the market keep going up?
Absolutely.
Could somebody pay even more?
Possibly.
But what if they didn't?
What if the market started turning the other direction while he was waiting for another $100,000?
That's the part I wanted him to think about.
Then the appraisal came in
Well, the transaction moved forward far enough for the lender to order an appraisal.
And the appraisal came back at approximately $950,000.
Now, remember, I had told my seller that I thought the property was worth somewhere around $900,000.
So the appraiser's opinion wasn't terribly far from what I'd been telling him.
But it was a whole lot less than the $1.1 million offer.
And let me tell you something.
My seller wasn't happy.
Not one little bit.
He exploded.
The other real estate agent was worried.
My son was helping me with the transaction, and he was getting pretty nervous himself.
Everybody could see we had a problem.
The buyer had offered $1.1 million, but the lender's appraisal didn't support that purchase price.
Now, that doesn't automatically kill a sale. Buyers can sometimes bring additional cash, parties can renegotiate, or other financing arrangements may be possible.
But it certainly makes things more complicated.
And this was a pretty big difference.
My seller wasn't having any of it.
And for about two hours, I got to hear exactly how unhappy he was.
Lol.
But here's something I want you to understand about that conversation.
I wasn't angry with him.
I wasn't trying to pressure him.
And I certainly wasn't going to make that decision for him.
I just wanted him to look at the situation as clearly as possible.
Sometimes the best thing you can do is give somebody time
I told him something like this.
"Listen, I understand you're upset. And I understand this isn't what you wanted to hear.
"But what's best for you and your wife is something the two of you have to decide.
"I'm not going to make that decision for you.
"But I want you to think about what we talked about before we ever got this offer.
"I told you where I believed the market value was. We have an appraisal now that's pretty close to that number.
"And you've got an opportunity in front of you that a lot of real estate investors would love to have."
Then I told him I didn't want an answer right that minute.
"Take your time. Talk to your wife. Think about it. Let's not make a decision just because everybody's upset."
And that's what we did.
I called the other real estate agent and explained that we needed a little time.
There was no reason for everybody to get aggravated and start making decisions they might regret.
The seller needed to think.
And I wanted to give him that opportunity.
Well, apparently his wife was a little smarter than he was. Lol.
The next day, my seller called me back.
He said, "Will, I've talked it over with my wife."
And I listened.
He said she'd been thinking about everything we'd discussed.
And she believed they ought to go ahead and sell the cabin.
Now, I'm going to tell you what I was thinking.
I suspect he had probably come to that conclusion himself.
But if he wanted to blame it on his wife, that was perfectly fine with me.
Lol.
I wasn't interested in winning an argument.
I was interested in helping my seller make a decision he and his wife could live with.
But then he asked me another question.
And this one nearly made me fall out of my chair.
"Will, what if we just put it back on the market? Do you think we could get $1.5 million?"
Good gracious.
We'd just spent all that time discussing a $1.1 million offer and a $950,000 appraisal.
And now we're talking about $1.5 million!
Lol.
But I explained it to him again.
"Listen, we can put it back on the market. We might even get another high offer.
"But if that buyer needs financing, we're probably going to face the same question about the appraisal.
"We've looked at the comparable sales. We've seen what the appraiser believes the property is worth.
"And there's no guarantee another buyer is going to come along and offer you even what this one has."
I wanted him to understand the difference between a possible offer and a transaction that could actually close.
Those aren't always the same thing.
And eventually, we worked through it.
He sold the cabin.
Now, I'm not going to tell you every part of that transaction was easy.
It wasn't.
But I believe taking the time to talk things through helped him make a better decision.
And that story has stayed with me ever since.
So should you sell your cabin while prices are strong?
Well, if you've got a cabin that's appreciated considerably, and you can sell it for an amount that makes good financial sense, I'd certainly consider it.
Especially if your reason for owning it has changed.
Maybe you're tired of managing rental property.
Maybe the maintenance has become more than you want to deal with.
Maybe you've got another investment opportunity.
Or maybe you've simply reached a point in your life where you'd rather have the money than the cabin.
There's nothing wrong with that.
Sometimes taking a good profit and moving on is a wonderful decision.
And here's something I think people sometimes forget.
You don't have to sell at the absolute highest price the market will ever reach to make a successful investment.
Nobody knows exactly where that highest price is going to be.
Not me.
Not your neighbor.
And certainly not somebody sitting on the internet telling you the market is guaranteed to go up another 20%.
I'd be mighty careful listening to that fellow.
Lol.
But what if the market is down? Should I wait?
Now, let's look at the other side.
Suppose you own a rental cabin in Gatlinburg, Pigeon Forge, Sevierville, or Wears Valley.
Rental income has slowed.
There are more competing properties for sale.
And the amount buyers are willing to pay isn't quite what you'd hoped.
Should you wait?
Well, maybe.
If your cabin is paying its bills, you're comfortable financially, and you don't have a pressing reason to sell, waiting might make sense.
You may enjoy owning the property.
You may believe in its long-term potential.
And you may have the financial ability to ride through a slower market.
But I want you to think about something.
What if the market doesn't recover as quickly as you expect?
What if rental income continues to fall?
What if the cabin needs a new roof, a heating system, or some other expensive repair while you're waiting?
And what if your family needs that money for something more important?
Those are the questions I'd be asking.
Because I don't believe you should sacrifice your family's financial well-being simply because you're convinced a better selling price is coming.
It might.
But it might not.
And the longer you wait, the more expenses you may have along the way.
That's why the decision to wait has to be based on more than hope.
Waiting isn't free
Here's something that gets overlooked.
Let's say you believe your cabin might be worth another $50,000 if you hold on to it for two more years.
Well, that's possible.
But let's suppose you're having to put $1,000 a month of your own money into the property because the rental income isn't covering the expenses.
That's $12,000 a year.
Or $24,000 over two years.
And that doesn't include an unexpected repair, additional selling expenses, or changes in the market.
Now, your mortgage payments may also be building some equity, so we need to consider that as well.
But here's the point.
You can't just look at how much more you hope the cabin will sell for. You have to look at what it's costing you to wait.
And sometimes, after doing the math, selling today starts looking a whole lot better than waiting for tomorrow.
Not always.
But sometimes.
Don't confuse the asking price with what the property will sell for
Now, let me go back to that seller with the $1.1 million offer for a minute.
Because there's another lesson in that story.
Just because somebody offers you a certain amount doesn't necessarily mean the sale is going to close at that price.
If the buyer is financing the property, the lender will generally want an appraisal.
And an appraiser is going to look at recent comparable sales, the property itself, and other relevant information to determine an opinion of value.
That appraisal can create a problem if it comes in below the contract price.
Now, an appraisal isn't the only way to understand a property's value.
And a cash buyer may not have the same financing requirements.
But when you're selling a property, you need to understand what kind of buyer you're dealing with and whether the transaction has a reasonable chance of closing.
A $1.2 million offer that can't be financed might not be as attractive as a somewhat lower offer from somebody who can actually complete the purchase.
That's why I believe good real estate advice involves more than putting a sign in the yard and waiting for the telephone to ring.
You've got to understand the market.
And you've got to understand the transaction.
What I'd do before deciding to sell or wait
Now, here's where I think a good local real estate agent can really help you.
First, I'd want to know what your cabin is realistically worth in the current market.
Not what it was worth during the last big boom.
Not what somebody down the road is asking for theirs.
What are similar properties actually selling for right now?
Then I'd want to look at your financial situation.
What do you owe?
What is the cabin producing in rental income?
What are your expenses?
How much money would you actually walk away with if you sold it today?
And if you decide to wait, what will it cost you to carry that property for another year or two?
Then I'd want to know something else.
Why are you considering selling?
Sometimes that question is more important than all the statistics put together.
Maybe you've made enough money and you're ready to move on.
Maybe the cabin has become a financial burden.
Maybe your family wants to do something different.
Or maybe you're just wondering whether the market is about to take another big jump.
Those are very different reasons to sell.
And they deserve different conversations.
I would never tell somebody to sell simply because I wanted another listing.
Nor would I tell them to wait simply because I thought the market might recover.
I'd want them to understand their choices.
And then I'd let them make the decision.
It's their property.
Their money.
And their life.
The bottom line
So, is now a good time to sell your cabin in the Smoky Mountains, or should you wait?
If you can sell today for a profit that meets your goals, and you're ready to move on, it may be a wonderful time to sell.
If the market isn't giving you what you want, and you can comfortably afford to keep the property, waiting may be reasonable, too.
But don't forget something.
There are no guarantees.
The market may go up.
It may go down.
And it may stay right where it is for a while.
After more than 30 years in real estate, I've learned that nobody gets every decision exactly right.
But I do believe we can make good decisions by studying the facts, understanding the risks, and being honest about what we're trying to accomplish.
I still think about that fellow who bought a cabin for around $400,000 and ended up with an opportunity to sell it for so much more.
He wanted just a little bit more.
Then a little bit more than that.
And I understood.
But sometimes you've got to recognize when you've already been blessed with a pretty good opportunity.
There's nothing wrong with wanting to make more money. Just don't let the money you hope to make tomorrow cause you to overlook a wonderful opportunity sitting right in front of you today.
Now, if you enjoy playing slot machines, I suppose you can keep pulling that handle.
But remember, you don't have to hit the biggest jackpot in the casino to walk out a winner.
Lol.
"Let your conversation be without covetousness; and be content with such things as ye have: for he hath said, I will never leave thee, nor forsake thee." (Hebrews 13:5)
Hope that helps. God bless.
Will Cupp
Sevierville Realtor and Real Estate Broker
Realty Executives Associates, (865) 983-0011
865-654-9807
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