By Brent Metzger
Sales Associate, Roche Realty Group
In 1974’s “Rumble in the Jungle,” former heavyweight boxing champion Muhammad Ali “shook up the world” by using a strategy called the “rope-a-dope” to defeat both the odds and his younger, stronger, undefeated and heavily favored opponent, world heavyweight champion George Foreman.
If you’re wondering what in the heck this has to do with real estate, bear with me and read on. I’ll explain below how to use a similar strategy to sell your home like a champion.
But first, let’s look at how the rope-a-dope worked. Starting in the second round, Ali repeatedly leaned back against the boxing ring ropes and covered up, allowing Foreman, who was renowned for his raw punching power, to land hundreds of thunderous blows, mostly on Ali’s arms and body.
If you thought taking punches from a 6’3” 220 pound, heavily muscled, Olympic gold medalist and heavyweight champion is a counterintuitive way to win a fight, you weren’t alone.
At the time many observers believed Ali was completely outmatched and absorbing a horrible, possibly lethal beating.
In reality, Ali’s position and protected stance caused much of Foreman’s punching power to be absorbed by the springy elasticity of the ring ropes. The result was that Foreman’s strength and energy were sapped by throwing a huge volume of punches that missed, were blocked, or landed with little damage.
After the fifth round it was evident that Foreman’s power was fading, increasingly depleted by the huge volume of wild blows he was throwing. In the rounds that followed Foreman’s punching and defenses were rendered ineffective.
By the eighth round Ali sensed that the timing was right. His moment of opportunity had arrived. He pressed in, ultimately landing a left hook and a hard right to the face that dropped Foreman to the canvas.
Ali won the fight, one of the most famous of all time, by knockout.
By using the rope-a-dope, Ali won using strategy over size, patience rather than power, and timing more than technique.
If you’ve owned property in Gilford, Laconia, Meredith or Moultonborough for the right length of time, you can use a strategy similar to the rope-a-dope to sell your home like a champion.
I call it the ROPI-Dope.
What is the ROPI-Dope? You may be familiar with the term “ROI” which stands for Return on Investment. Business professionals and investors frequently use this term to describe how much profit they’ll earn in exchange for the amount of investment they put up.
As I specialize in real estate, I’ve appropriated the term “ROI” and modified it to be specific to property, hence “ROPI”—Return on Property Investment.
How can the ROPI-Dope help you sell like a champ? Like Muhammed Ali, you can use strategy, patience and timing to sell your home for a profit, regardless of its size.
Here’s an example of how the ROPI-Dope works: many homeowners who purchased single family homes in Laconia in 2008, which was the previous peak in area home values, have been “on-the-ropes” ever since.
Their property investment has been battered by market blows that BOOM! drove median single family home values from $214,950 in 2008 to $161,000 in 2009 and BAM! down to just $155,000 in 2013.
But strategic patience is often rewarded. The home market is elastic, just like ring ropes.
By 2014 Laconia’s median single-family home prices spiked a bit to $190,000. Encouraging, but it wasn’t time to press the attack just yet. Prices dropped again in 2015, to $175,000.
In 2017 Laconia area single home values finally surpassed the previous high in 2008, hitting a median closed price of $215,000.
Is the timing right? Has the moment of opportunity arrived? Muhammed Ali looked like he was losing throughout much of his fight with George Foreman. Similarly, people who bought in 2008 have looked like they were losing value for ten years.
But Ali prevailed because he was patient and he had a plan. He endured because he understood elasticity. You can too.
Ali was victorious in round eight, and now that median home prices have surpassed the previous peak, 2018 may be the year for you to stop leaning against the ropes and take a swing at a winning sale.
But median prices don’t tell us the tale-of-the-tape for your home specifically. Your Lakes Region home’s value may be above or below the general trend, depending on a number of factors. And if you bought a home in Gilford, Laconia, Meredith or Moultonborough prior to 2004, your ROPI may be a knockout.
The best way to know is to get a comparative market analysis of the value of your home so you can see what it might sell for in today’s market conditions. If you’ve seriously considered selling, please contact me to learn more about your home’s value. When it comes to your Return on Property Investment, is it time to act, or better to stay covered and endure a little longer?
Brent Metzger is a sales associate at Roche Realty Group in Meredith, NH and can be reached at (603) 229-8322 or (603) 279-7046. Please feel free to visit www.rocherealty.com to learn more about the Lakes Region and its real estate market.