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Health & Fitness

Economic Anatomy of a Home Sale

How a single sale can drive our economy...

Why are home sales transactions important to the economy?  Isn’t a sale just one seller either making or losing money based on what one buyer will pay for their home?  How can a home sale drive our economy?

Realtors make commissions when a home sells.  Unfortunately there are less sales at lower price than in seemingly healthier recent economic times.  Loan brokers make money by (hopefully) fitting the buyers with the loan products that best suit their needs.  Title companies are involved and get paid in the transferring of real property through escrow.  The government makes money on transfer taxes.  Towns make money on resale inspections and permits.  In Marin County alone there are thousands of people who are directly affected every year when properties change ownership, but how is the rest of the economy affected?

Hardware and home improvement stores stand to gain when properties are sold.  In the process of a sale properties are prepared for the market.  Contractors, handy men and construction companies are hired to do a myriad of tasks.  Their activities are not just limited to remodeling kitchens and baths, two of the most high profile and best investment returns when selling a home.  Painters do wonders for a house.  New carpet and flooring can help make a home very appealing. 

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Roofs are replaced, increasing curb appeal, but not necessarily boosting the value of the house.  Sewers get cleaned out, repaired and sometimes replaced.  A new sewer isn’t pretty but its music to the ears of the plumbers who need to make a living.  Electricians address potentially very real safety hazards, replacing boxes and sometimes wiring that hasn’t been touched in decades.  We use a lot more electricity in the 21st century than we did when many of the houses we sell were originally built.  Many of these projects wouldn’t be undertaken if a house wasn’t either about to come on the market or recently sold, the best time to do work on a property being either shortly before or after a purchase.

Landscapers can do a lot for a house, miraculously transforming jungles into backyards.  Somebody has to clean up these properties, and often maid services are used to prepare and keep properties prepared for potential buyers.  Stagers are still used as well, for both consultative services and providing tasteful furniture and ambiance.  A well staged home can attract just the right buyer.

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There are also all kinds of businesses that you wouldn’t normally think about that benefit from the sale of a home.  How about the pool cleaning service that shocks a green body of water back to life?  Locksmiths often change locks after ownership changes hands.  Of course movers are needed for the sellers and new buyers.

When a property goes up for sale there are numerous businesses that benefit.  It’s important that properties sell because the livelihood of so many people is dependent on properties changing hands.  The ‘For Sale’ sign you see on a street doesn’t just represent one house, but our entire economy.          

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