Why I would never sell to someone I knew

Discussion in 'Investor Psychology & Mindset' started by The Y-man, 4th Sep, 2017.

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  1. The Y-man

    The Y-man Moderator Staff Member

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    I recently had a discussion in which I was asked if I would rip people off when selling a property (but this I guess would apply to anything, like a car for instance).

    While I think instinctively one wants to get on their ethical high horse and say "Oh no, of course not!", if maximising profit or capital gain is the name of the game, then yes, I think I am trying to rip someone off.

    For example, when I am selling a property, I am usually doing so because it doesn't suit my plans in some way (i.e. it's a "dud"). Now, I am not saying it would be a dud for everyone (one person's trash could be another's treasure).

    Further more, I spend an inordinate amount of time guiding people how to do cosmetic touch ups and quick fixes (the proverbial paint hiding a thousand ills) before selling - so of course I do them myself.

    Even if there was something I was not going to fix, I would not be advertising the list of potential defects that needed to be attended to (I also spend a lot of time guiding people on what to look out for when buying too - it's part of DD).

    For this reason, I personally avoid selling to friends and people I know - because I feel absolutely obliged to tell them everything that might be wrong with it, or give them a very low price.

    Let's say the situation in this thread happened to me
    Too good to be true
    and the person offering twice what I thought was the market value of my property, was someone I knew.

    Now other than an extremely wealthy relo who was going to go and blow the money gamblng or something, I would really feel the need to ask them "Have you done your research?", "Do you know the recent sales in the area?" etc etc.

    Yet call me a hypocrite, but if it was to some stranger, I'd be like "sign here!"

    Interested to hear the thoughts of others.

    The Y-man
     
    The Y-man, 4th Sep, 2017
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  2. inertia

    inertia Well-Known Member

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    I don't think the 2 attitudes are mutually exclusive - do the cosmetic reno, AND tell your family/friend about it, leave it for them to decide if they want to pay the price you are asking.

    Cheers,
    Inertia.
     
    inertia, 4th Sep, 2017
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  3. Ouchmyknees

    Ouchmyknees Well-Known Member

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    I won't buy/sell from/to family/relative/friend, it is very difficult to make it an arm's length transaction and if anything goes wrong I get blamed.
     
    Ouchmyknees, 4th Sep, 2017
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  4. hammer

    hammer Well-Known Member

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    The honesty of this post is breathtaking and refreshing. You'd make a great friend.
     
    hammer, 4th Sep, 2017
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  5. Archaon

    Archaon Well-Known Member

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    I agree, I would act the same in the OP's position.
     
    Archaon, 4th Sep, 2017
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  6. Phar Lap

    Phar Lap Well-Known Member

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    I seriously do not understand the pursuing of this type of scenario.

    I certainly do not go with the intention to rip off anyone in any transaction ever.

    When I go to buy something I do my own DD.
    Check it out thoroughly.
    If there is a problem after that then maybe my bad.

    But, and its a big, but.
    There are serious consequences for someone who "knowingly" hide or conceal anything that may cause financial loss to a buyer. Even after they have done their DD and might have missed it.

    So, knowingly ripping people off, is a rather sordid notion Im struggling to come to grips with.

    If someone wants to be honest, do it in the first place, don't hide anything.
     
    Phar Lap, 4th Sep, 2017
    #6
  7. Cimbom

    Cimbom Well-Known Member

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    I agree with this. Unless it was some kind of bizarre situation where I absolutely needed to sell it that instant, I would never sell to someone I know.

    I know of cases where people have done this for cheaper items (like a car, etc) and they then feel obliged to help the buyer with every little issue that crops up, even if it was fine when they sold it. A no from me
     
    Cimbom, 4th Sep, 2017
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  8. Sackie

    Sackie Well-Known Member

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    Highest price wins for me, regardless of who it is. I don't see cosmetic touch ups, selling at market peak for maximum premium etc unethical in the slightest and i always try to sell quality stock. Besides, most likely wouldn't be family or friends anyway as they are generally too business savvy.
     
    Sackie, 4th Sep, 2017
    #8
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