She listed the house for . Why $275,000 and not $150,000? Because in Fairview, more people wanted to buy homes than there were homes for sale. A new tech company had opened nearby, bringing jobs and families. That’s demand . The limited number of houses was supply . High demand + low supply = higher prices.
An elderly woman named Mrs. Gable owned the house. She had bought it 20 years ago for . Over time, she paid off most of her mortgage. The difference between what the house was worth today ($250,000) and what she still owed the bank ($50,000) was her equity ($200,000). Equity is the owner’s true wealth in the property.
Meanwhile, across town, a savvy investor named Carla was watching. She didn’t want to live in a house; she wanted to make money from one. She bought a duplex (two apartments in one building) for $350,000. como funciona el real estate
The bank agreed to lend him $247,500, but only after checking his credit, job history, and income. This loan is a . Leo would pay it back slowly over 30 years, plus interest (the bank’s fee for lending the money).
But Mrs. Gable wanted to move closer to her grandchildren. So she decided to sell. She listed the house for
In a sunny town called Fairview, there was a small, slightly worn-out house on Maple Street. It wasn’t fancy, but it had good bones, a solid roof, and a nice yard.
Carla also knew that in 5–10 years, Fairview’s growing population would likely make her duplex worth $450,000. That increase in value is . She could then sell it for a profit or borrow against the new equity to buy another property. A new tech company had opened nearby, bringing
Enter Leo, a young graphic designer. Leo had saved $27,500 for a down payment (10% of $275,000). He couldn’t pay the rest in cash, so he went to a bank.