Most stock brokers offer two kind of stock trades: Market trades and Limit trades. Market trades usually get executed within seconds, while a Limit trade may never get executed. A market trade means that you want to purchase, for example, 100 shares of Amazon at the market price. A Limit trade means that you want to purchase 100 shares of Amazon at a certain price, let’s say $X each. Often, an investor is looking to buy the stock at a slight discount to the current market price in a Limit trade, because otherwise the investor could just purchase it at the market price within seconds. What is the tradeoff? The tradeoff is that the order may never get executed and minutes later the market price of Amazon has increased so much that even a discount to the market price would be more expensive than the purchase price that investor could have gotten earlier in a market trade. If an investor is looking to purchase Amazon stock, the investor is betting that Amazon stock will appreciate. If that is the belief that investor has, optimizing on the purchase price is like optimizing for pennies when the bigger bet is to pocket Amazon stock appreciation. Now here is the rub. A limit trade does not actually give you a price better than market. The limit order at $X gets executed when the market price falls to $X, counter to the thesis the investor had in the first place. In fact, it is extremely unlikely that a falling Amazon stock would fall until $X exactly, then your trade gets executed and then the price start appreciating again. No, usually, if the market price has fallen to $X, it is likely that it might fall a bit more. So if you were to dictate your own price, you are betting against your own thesis.
With a heavy heart I post this... 😢 pic.twitter.com/sG8bBP142P— Lance Bass (@LanceBass)
How do I pick the list price?
This is a question we hear a lot. First, let's get the elephant out of the room. Sellers do not determine the sale price of a home, buyers do. What sellers can do is adopt a strategy so you can find the buyer who values your home the most. The sellers may decide not to sell the home, but they can’t directly determine the purchase price of the home.
An illustrated guide to help you follow the down payment articles with your own numbers
Welcome to our illustrated guide on how to use the Faira down payment calculator!
If you haven’t checked out the other articles in this series yet, head over to the introduction for a summary and links. Download the Excel spreadsheet “Faira down payment calculator” and let’s begin!
You will input your own numbers in the cells with a white background and black border. Example:
The cells with a gray background show you results of calculations. Example:
Mike and Shannon were looking for a way to save money when selling their home in Bonney Lake, WA. After checking out several companies that promised big savings, Mike called Faira. Although the savings was attractive to him, Faira's transparent and innovative approach is what led him and his wife to sign up to sell with Faira + Agent for 1% commission.
Saving more can help you buy faster, but you’ll still be limited by this “magical” number
There are homes out there that you think you can probably afford and some that you just know you definitely can’t. But where exactly is the line that separates them?