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April 23, 2007 – Comments (3)

This story of a DC-area real estate agent ought to give pause to anyone thinking that agents automatically: A) have their best interests in mind and B) know what they're doing.

Morrow, a real estate agent for Keller Williams Realty in Arlington, bought a one-bedroom condo in February 2006 for $280,000. He intended to fix it up and sell it. But the repairs he needed to make were more extensive than he thought they would be.

For almost a year, Morrow paid the nearly $4,000-a-month mortgage on the Arlington house he lives in and $2,300 for the condo.

"The market at the time wasn't showing that it was going to get a lot stronger, so I decided it was best to take a loss and get out from under it," he said.

He sold the condo for $265,000. After paying a 3 percent commission to the buyer's agent, a loan prepayment penalty of $8,000 and other closing costs, he ended up owing the bank $33,000, which he did not have.

Hat tip to the housing panic blog.

3 Comments – Post Your Own

#1) On April 23, 2007 at 2:06 PM, CycleFreak7 (< 20) wrote:

Hahahahaha

Real estate speculators make me angry.  They buy up properties in some "hot" area which servers to drive prices up even faster.  The unfortunate people that - for whatever reason - actually need to live in that area are basically forced to pay these outrageously inflated prices.

In the end, the owners, not the speculators, are the ones who really get burned.

 

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#2) On April 23, 2007 at 2:39 PM, TMFBent (99.81) wrote:

I know. Nate P. and I were discussing the other day how some of these people should be tarred and feathered. Really, an old-school humilation is the least they deserve for hosing so many honest people.

Met a young couple at a BBQ this weekend bemoning their fate. They let themselves be panicked into buying high last year becaus they believe they'd never get in otherwise. Now they're stuck in a home they don't even like.

I don't want to hold them blameless, but it was hard not to feel a pang of anger at the way they were railroaded by the schemers out there. At least they can afford the place they're in -- at least I understood that. How much worse for those that aren't able to make rent.

(And yup, I mean rent. Renting from the bank is still renting!)

Sj

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#3) On April 23, 2007 at 8:07 PM, QualityPicks (24.65) wrote:

Four years ago, I was in a position to buy a house. I felt I was going to be too stretched with the payments so I decided not to. Houses had already appreciated 40%, I didn't think that could continue. I have been renting for 4 years, hoping prices would come down. In retrospect I can say I screwed up. But in the meantime, I have felt the pressure to buy all this time. I have been tempted by "exotic" mortgages, but I always comeback down to my senses when I read the fine print.

I don't know what to think anymore. I'm losing hope even though prices came down some 10% (after going up 100%), I still have the feeling I will never be able to afford a house in my area again.

Now I'm reading how lending companies are "working" with customers that can no longer afford their mortgages so that they don't have to foreclosure. They are refinancing, extending the length of the loans, lowering rates, whatever. Nice! People that were irresponsible are now "getting rewarded". I, on the other hand, can't still afford a house. House prices may not drop that much for now, as many foreclosures will be avoided.

I really hope there is a really good shakeout in the housing/lending industry. It is only fair.

 

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