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Lessons From A $655,000 Loss

Why Your Net Worth Might Be Dramatically Undervalued
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Your net worth might be much higher and you don’t even know it. This is a realization I came to after receiving some feedback from a reader.

In the post, To Pocket List Or List On MLS, I wanted to help home sellers who value privacy to get the best price possible for their homes.



It is now a national pastime to go online and view homes for sale on Zillow and Redfin. It’s like escapism for the millions who are trapped in their dungeons.

However, if you are a Stealth Wealth practitioner, the last thing you want is everybody to know the details of one of your largest assets.

As a result, I’m a proponent of pocket listing first, and then, if necessary going on MLS. By going the pocket list route, you also get to test out the market without growing your Days on Market count. The higher the DOM count, the more your property will take a price hit.

Although the National Association Of Realtors has banned pocket listing for its member agents for now, you can still do a pocket listing by privately sharing the listing within your agent’s real estate brokerage house. The larger the real estate brokerage, the more agents and potential buyers will see your listing.



After sharing my experience with both pocket listing and the MLS, I got shot down by a realtor named Igor. He said I was wrong to pocket list. He also said I was wrong to recommend people try pocket listing first.

It’s good to disagree so most people considering the two options can come to a better decision for themselves.

Given I did sell via a pocket listing, Igor implied that I left hundreds of thousands of dollars on the table. $655,000 to be exact! Ouch. Let’s explore what happened and see if we can learn some lessons if you plan to sell your house today. I’ll also discuss some general life lessons as well.

How I Lost $655,000



Below is Igor’s comment to me. For those who are considering between pocket listing and listing via the MLS, the message is for you too.

It basically says I don’t know what I’m talking about. And despite Igor not being a San Francisco realtor, he said my San Francisco realtor and I didn’t do the proper market research to get the best price possible.

Although in my post I attribute market conditions as the primary reason for my two selling experiences, in his words, “I blew it with my home sale.”

Igor writes,

When I’ve read your articles in the past, you’ve struck me as an intelligent, rational person, however, reading this made me cringe a bit.

Let’s forget for a second that arguing that doing something is bad/good based on ONE experience. This is silly in and of itself.

I would instead focus on the fact that you drew a conclusion that pocket listings are good because you sold in a hot market while you couldn’t sell on MLS in a terrible market.

Are you not seeing the problem?

The fact that your home was in a less desirable location amplifies the market quite a bit. Buyers stay away from undesirable homes completely in a bad market, as you experienced in 2012. While in hot (borderline crazy) market of 2021- 2021, you hear things like “El Camino isn’t THAT busy”, or “I don’t mind the train, I grew up in New York”.

I would also bring up the points of –
Did you truly know the value of your home in 2012?
Did you truly know the value of your home in 2021?

I would submit that you did not. Even if you think you did. If you knew the value in 2012, you wouldn’t have been surprised by your home not selling, so selling over or under your expected price, is not an indicator of success.

Prices in most parts of the bay area doubled from 2012 to 2021, so your initial expectation of 1.7M is equivalent to $3.4M in 2021, not $2.5M. (Assuming prices doubled in your neighborhood). To me, your price expectations both times seem rather arbitrary.

Lastly, implying that if you had done a pocket listing in 2012, you would have sold better is beyond silly. Thinking that you sold better as a pocket listing in 2021 than you would have on MLS is always possible, but extremely unlikely.

I would submit, that perhaps if you sold on MLS in 2021, you would have had 10-20 buyers fighting for your home and you would not have needed to drop the price because of the leaking windows.

The reason for this is that non-contingent offers were (and to an extent still are) the norm. So I would argue that you could have easily saved $45K if you had listed … plus you probably would have gotten a higher price to begin with.

Unfortunately, it sounds like you blew it with your home sale. Luckily, you sold in one of the hottest times/markets, so the market didn’t let you shoot yourself in the foot and sell for $2.5M, even with just the one buyer.

It’s hard to game the system, and to me, it sounds like you’ve fallen for a sales pitch.

Take a step back, and re-think this situation from a new perspective, then delete this post 🙂

Phew! I guess it’s better to be lucky than good. I strongly believe our wealth is mostly due to luck, not hard work or skill. Igor’s comment proves my point.

Why Your Net Worth Might Be Much Higher Than You Think



According to Igor, I left $655,000 on the table selling for $2,745,000 instead of $3,400,000. It’s sometimes hard to hear the truth. However, the truth is what will make us richer, wiser, and free.

I am impressed that Igor, who is not a San Francisco realtor, knows more about my property than I do. Even after owning my property for 13 years and being a SF real estate fanatic, I’ve still got a lot to learn.

In my defense, my realtor and I did extensive market research on pricing before coming up with my proposed aspirational price of $2,500,000+.

I had tried to sell five years earlier at $1,700,000. Back then, I had gotten only whisper offers at around $1,500,000. The reality is, back in 2012, I wasn’t really motivated to sell. I was more curious about testing the market out after I left my day job.



The lack of motivation is why I had set a high aspirational price of $1,700,000. At the time, I knew my home was worth closer to $1,500,000. Therefore, if I were to sell, I had to sell at a price that I couldn’t say no to. Luckily, nobody offered me anything.

Igor didn’t know this, nor did new readers.

Related: Why I Sold My Rental Property: Had To Live For Today

Research House Pricing Thoroughly

During my 2021 pocket listing, my realtor sent the listing internally to over 100 agents at her real estate brokerage. Then she sent the listing to the Top Agents Network to get their feedback on pricing first.

We did not reveal any price or telegraph that I had an aspirational price of $2,500,000+. We wanted to let the realtors suggest a realistic selling price. The consensus from within my agent’s brokerage firm and within the Top Agents Network was somewhere between $2,300,000 – $2,400,000.

Before I decided on my realtor, I had several veteran SF realtors come by to give me their opinions as well. It’s important to interview multiple agents before picking one.



They all said if I could get $2,400,000, it would be a home run. But to get $2,400,000, I would first have to paint the front of the house and do some remodeling. The cost would be about $50,000.

Then a couple friends who owned in the neighborhood gave me their assessment. All of them said between $2,300,000 – $2,500,000 if I did some remodeling work.

One person said maybe $3,000,000, but that I would have to spend $300,000 – $500,000 to redo the whole place. Forget it. I was a new father and didn’t have a year to deal with a big remodel.

Double The Price Is Huge

From 2012 to 2021, I think real estate prices in San Francisco rose by roughly 65-70%. Some appreciated more, some appreciated less. 65-70% is the median. Price appreciation can be very house specific due to location, condition and features.

If the true value of my home was $1,500,000 in 2012 (not my $1,700,000 moonshot price at the time), then a fair price would be about $2,475,000 – $2,550,000 (+65%-70%).

My house had issues due to its location. It also had old knob and tube wiring which may be a fire hazard. Further, there was a lot of road noise. Therefore, I figured it was on the lower end of the price appreciation spectrum. Anything above $2,500,000 would be considered a great price.



However, Igor believes SF home prices appreciated closer to 100% during this time period. As a result, he thinks I should have gotten around $655,000 more. Sigh. All this time I had thought I had done a great job.

Does The Median $/SQFT Matter?

At $3.4 million, Igor believes my home on a busy street next to the busiest street in SF would have fetched $1,642/sqft. Even at $3 million, my 2,070 sqft home would have traded for $1,449/sqft.

Back in 2021, the average $/sqft for a home on a quiet street in a similar neighborhood was about $1,150/sqft. If we used the median $/sqft, then my home would be worth $2,380,000, or right in line with what every agent told me.

However, once again, I thought my home should trade at a discount given its location. Further, in 2005, I had bought the home at a ~15% discount to the median precisely because of its inferior location.

Ended Up Selling For A Premium

In 2021, I ended up selling my home for $1,327/sqft, or an 8.3% premium to the median $/sqft of $1,150. The initial offer came in at $2,600,000. I countered at $2,800,000, and we settled at $2,745,000.

Yes, there was a couple hundred square feet of unwarranted space due to only 7-foot high ceilings. However, this space does not count in the official square footage. Plenty of SF homes have unwarranted space. The lot was also smaller than the average 2,500 sqft, at 2,200.



I was happy selling at $1,327/sqft because I only had one buyer who wrote an offer in 2021. The buyer almost didn’t come through because he was having a hard time getting a loan. We made it seem like we had another interested buyer, but we didn’t have a written offer.

We contacted every realtor she and I knew. Nobody else was interested mainly due to the location.

Always Nice To Dream Big

It’s hard for me to believe my house could have gotten $1,642/sqft, or a 37% premium to comparables we saw at the time. At $3 million or $1,449/sqft, the house would still be at a 17.4% premium despite its inferior location. I’m not sure why Igor believes my home is worth such a huge premium. Maybe he secretly thinks highly of my sales skills.

Whatever the case may be, as you can see from the 2Q 2021 chart below, the median $/sqft for my old home’s neighborhood is $1,229 $/sqft. The market peaked in the Spring of 2021, then faded until about the fall of 2021 when prices started picking back up. The market was really strong in 2021 before the pandemic hit. Now it’s kind of hit or miss.

Although I only sold my home for $1,327/sqft, a 19% discount to where I should have sold according to Igor, at least the price was 8% higher than the median price in the neighborhood back then and today, actually.

Key Net Worth Realization

Despite leaving $655,000 on the table for not selling at $1,647/sqft, I must look on the bright side of things. If I didn’t, I’d probably roll up in a ball and cry after eating a pint of rocky road ice cream.

If what Igor says is true, I realize I may be currently underestimating my net worth by several million dollars! After all, I’m long several other properties in San Francisco.



All of the properties are conservatively valued in my Personal Capital account. I essentially use a mixture of online valuations and my own valuations and then take a 15% discount.

By being more conservative with my net worth, I create this buffer in case bad things happen. Having a conservative net worth estimate also helps boost motivation to keep building.

Lessons For Selling Property & More

Based on this exchange with Igor, here are some important lessons we can all learn if you plan to sell your home:

1) Get at least 10 professional pricing opinions before you sell. Then get some more.

I thought I had done a good job getting pricing estimates from many top agents. I also did a lot of research as well. But that’s not good enough. Once you get at least 10 professional pricing opinions, get another 10 more pricing estimates for a total of 20.

You’ve got to be accurate about pricing before coming to market. If you’re wrong, your listing will sit and vultures will swirl. You’ll not only lose money, but time.

2) Find your own Igor!

Although I still have my doubts that my house could have sold for a 17% – 37% premium to the median price of my neighborhood, there’s always a chance with the right agent.

It’s just like the famous line in Dumb and Dumber, “So you’re telling me there’s a chance!” If you don’t really need to sell your home, it may be good to find yourself a realtor like Igor who expects only a record price for your home.



You might waste a lot of time and some money going with a realtor who believes in a moonshot price. However, you just never know. If the realtor truly believes in the price, then he will do everything possible to get it. If he fails, he will have mostly wasted his time. Further, if you go the pocket listing route, you won’t get hit as bad.

3) Swallow your pride.

One of the main reasons why doing a pocket listing is nice is because it helps protect your pride if your house doesn’t sell for the price you want. My ego was bruised in 2012, which is part of the reason why I didn’t want to try again in 2021.

However, if you really want to sell your home, you probably should list it on the MLS eventually. I still believe trying the pocket listing route first is the right move for sellers who value their privacy. However, the MLS provides maximum exposure. The greater the exposure, the greater your chances of finding a buyer.

4) Beware of realtors who promise you the moon.

If I just recommended everyone find their own Igor, then point #4 is inconsistent. However, everything is relative. Getting an Igor to try and sell your house for a 15% – 40% premium is a long shot, but possible. Then there are realtors who might promise you a 50% higher-than-median sales price because they are really delusional or really desperate.

Given volume is down, business is also down. Thus, to get your business, there may be more agents who will overpromise your home will get a record high price.

After a couple of weeks on the market with no offers, these realtors will encourage the seller to lower the price. They will skillfully blame the market, poor staging, or some bad feature for why the home hasn’t sold. At this point, most sellers won’t try and find a new realtor because of sunk costs.

To sniff this realtor strategy out, sellers must diligently do their market research beforehand. It’s not hard to look at all the similar homes that sold within the past 12 months to get an idea of price. When open houses come back, it’s not hard to visit these comparable open houses to get a true sense of your property’s valuation. You must do the same.

5) Listen to critical feedback and make adjustments.

Unless you’re perfect, you’re likely going to make a lot of suboptimal financial moves. Keep an open mind and listen to critical feedback from others who are more experienced than you.

Being coachable is a a critical skill for improvement. As a high school tennis coach myself, my students who are most willing to absorb instruction have higher winning percentages.

It didn’t feel good to be told that I was basically dumb and left $655,000 on the table. But I’ve decided to learn from my mistakes, write this post to help others avoid the same mistakes, and do better for my family next time.

Accept your blind spots. We all have them.

6) Stop thinking so lowly of yourself and your assets.

You don’t want to have delusions of grandeur. At the same time, you also don’t want to think so lowly of your assets and yourself. If you do, you will undervalue all that’s around you.

I thought my home should trade at a discount because I bought the home at a discount. Instead of thinking being next to the busiest and noisiest street in SF was a negative, I could have turned it around as positive.

Easy access to the highway! A constant white noise with the occassional honking to help you sleep at night!

We must develop a strong money mindset to get rich. In addition, we must have self-confidence. One of the ways to do so is to tell yourself: Why not me too?

7) Everybody has an opinion. Just keep on going.

On your path to financial freedom you will face many agonizing decisions. It’s great to get the counsel of others. After doing your research, you must choose. Once you choose, you must be at peace with your choice and move forward.

You’ll only know several years down the road whether you made the optimal choice or not. Getting down on yourself if you made a suboptimal choice is a waste of time. Learn from your mistakes and keep moving forward.

I could have used the $655,000 in gross profits to help pay for my children’s college education if I had made a wiser choice. However, I’ve learned my lesson and now will simply try harder and be more strategic to provide for them.

You Only Need To Find One Buyer

Even if my sale price was right, there may have been someone who was willing to pay way above market price. Maybe that person won the lottery or worked at a company that just went public. Maybe the person has the Bank of Mom & Dad paying, so she doesn’t really care.

For shits and giggles, I might try to list one of my homes on the MLS at a 20% – 40% premium to the market and see what happens. I will find my Igor to help get the sale done.

I’ll also only do a little bit of preparation work, like mop the floors, to protect my downside. If nothing happens, I’ll just keep the property because I don’t really want to sell. I’ve got semi-passive income to generate and kids to care for.

Time To Feel Rich Again

For those of you who own real estate, you may be significantly undervaluing your net worth. In fact, anybody who owns any illiquid assets may be significantly undervaluing their net worth.

Inflation has a sneaky way of catching up with us. The longer we hold our real estate holdings, the more likely we are to undervalue our real estate holdings, no matter what the online estimates and real estate agents tell us.

We naturally anchor to a cheaper price point that is so far in the past that we are often incredulous about the true market value today. The phenomena is like our parents still viewing us as children, even though we are grown adults.

Rocking A Higher Net Worth

Thanks to Igor, I’ve created another net worth estimate to aggressively value all my real estate holdings. With a net worth several million dollars higher, I feel less anxiety during this global pandemic.

If you’re looking to reduce anxiety and improve your mood, you might want to create an aggressive net worth estimate as well.

Once you’ve finished your calculations, you can walk around your living room with your chest out, feeling like the big man or woman you really are!

It feels nice to feel so much richer, at least on paper. Milk shakes on me once the pandemic is over folks!

Undervalued net worth that could be much higher

Conversely, you can still follow my general recommendation of conservatively valuing your net worth. But where’s the fun in that? Dream big or don’t dream at all.

Related posts:

What Your Net Worth Should Be Based On Income

Perpetual Failure: The Reason Why I Continue To Save So Much

Readers, any luck on selling a property in an inferior location for a major premium? If so, how did you do it? Have you ever hired a realtor who promised you a premium price, but the property didn’t sell? What did you guys do next? Do you think your net worth might be actually much higher due to overly conservative estimations?

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