Of course, this headline caught my eye and I had to read the story, but figured there had to be a catch. Of course, my intuition was correct. Yes, the house was sold for $1 (and other due consideration, as the deed likely reads), but it is going to cost the new owners $100,000 to have it moved! However, considering the house, they are probably still getting a “good deal” on it. Read about it here:
Iconic House Sells for $1
Iconic NJ beach house ready to sail to NY
Everyone has heard the tales of buying a Mercedes (Jaguar or which ever model was used in the tale) at auction for A STEAL OF A DEAL! Of course, they only hear part of the story… what they don’t hear, is that is was a burned-out car or it was at the bottom of a river and they had to pay to get it dredged out.
While the actual story may not be a “myth”, such things usually reach mythical proportions as the story evolves into those “Buy for Pennies on the Dollar! Go To Auction” books, DVDs, and other such information being offered for sale to unwitting buyers looking for those “STEALS of a Lifetime”.
While you may find some great deals and occasionally someone may get a “steal” on something, most items typically bring what they are worth at an auction. This is the reason that auctions have been used for over two-thousand years (auctions have been traced back to as early as 500 B.C.). Of course, it’s also why the Stock Exchange is the biggest daily auction, as commodities and stocks are sold for their current value. Now, if you bought stock when prices were skyrocketing and it was selling at $50, but now it’s sitting there, selling for only $25, you might be asking yourself one of two questions… 1.) did I pay too much? or 2.) should I buy now? It all depends on which side of the fence you’re sitting. What if you buy it now and the price falls further? Did you get a good deal?
Auctions are the best method to determine the current market value. However, it doesn’t matter what you paid for it or what you think it’s worth, the free market will let you know what it’s actually worth today. So, you may think that if you hold on to it, it will go up in value… well, almost everyone bought newspapers, magazines, etc., when JFK was assassinated, with that same thought. All it means, is there are a lot of old newspapers and magazines collecting dust, somewhere. I probably find at least one or more, at almost every estate I’ve ever cleaned out. So, what do you think they are worth? How much would you pay for another one? What do you consider a “bargain”?