The decision to sell a property is not one to be taken lightly. Unlike more liquid investments, property sales take months, involve multiple points of negotiation, and carry significant transaction costs. From the seller’s perspective, agreeing to work with the wrong buyer can be both frustrating and costly. The buyer interview is one tool that can be used to minimize that risk.

Having lived and invested through multiple cycles, with the scars and gray hair to prove it, there are certain rules of thumb that have become part of my investment toolkit. One in particular comes in handy at year end: the holiday party indicator.  

Ask enough active real estate investors what they daydream about, and you’ll hear some version of the elusive off-market deal, where they swoop in to buy amazing properties with no competition. And many investors pride themselves on avoiding auctions, instead relying on relationships and reputation for deal flow. But in practice a buyer is always competing, if not with other buyers than with the seller’s expectations – which might be even tougher to beat.

Teacups and human bones. These are two of the simplest examples Nassim Nicholas Taleb (of Black Swan fame) uses to illustrate the Antifragile concept in his book of the same name.

A Rorschach test for real estate investors.