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 if you purchased property at the previous Lakes Region market peak, between 2006 and 2008.
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 a barrage of punches from a 6’3” 220-pound, heavily muscled, Olympic gold medalist and heavyweight champion is a counterintuitive way to win a fight, you wouldn’t be 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 transferred to the springy elasticity of the ring ropes. As a result, 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 endurance and power were fading, increasingly depleted by the huge volume of wild blows he was throwing. In the rounds that followed, exhausted, Foreman’s punching and even 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 homes in Laconia between 2006 and 2008, which was the previous peak in area home values, have been “on the ropes” ever since.
Their property investment was battered by market blows that BOOM! drove median home values from $212,000 in 2006 to $151,000 in 2009 and BAM! down to just $146,900 in 2013.
But strategic patience is often rewarded. The home market is elastic, just like ring ropes. In time, it snaps back.
By 2018, Laconia’s median home prices ($183,000) finally surpassed the previous high in 2008 ($180,000).
Is the timing right for you to sell, even if you bought at the previous peak? Has your moment of opportunity arrived? As with boxers, that decision requires shrewd judgement and professional coaching.
Muhammed Ali looked as if he was losing throughout much of his fight with George Foreman. Similarly, people who bought in 2008 have looked as if they were losing value for 10 years.
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, 2019 may be the year for you to stop leaning against the ropes and take a swing at a winning sale.
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 numerous factors. For example, what were previous sales specifically comparable to your home? What improvements and updates have you invested in? Is your home a victim of deferred maintenance (the equivalent of an out of shape boxer getting beat up by a conditioned one)? How much have you paid down? What if the market drops again next year?
On the other hand, if you bought a home in Gilford, Laconia, Meredith or Moultonborough prior to 2004, when prices were good for buyers, 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? Let’s find out.