Why would any developer agree to sell a $680,000 pre-construction condominium to a 20 year old kid living at home and working for Tic Tok? I guess it seemed like a good idea at the time when the condo bull market appeared endless. Now that the condo is built and the kid hasn’t got the money to complete the deal, things are not turning out as expected.
Anyone still remember 2008? There were guys giving mortgages to people’s pets. There were -banks- writing second and third mortgages to deadbeats who were paying off the first with the second, and the second with the third, because they had NO money. You didn’t even need a pulse to get a credit card. Your dearly departed grandma could get one.
And then the music stopped. oops. Lots of custom cars, classic cars and bikes, lots of boats, lots of houses, cottages, farms suddenly for sale. Cheap! Super, amazing cheap.
I really remember that well. But it seems that lenders never ever learn, doesn’t it?
Why a $680,000 condo for a 20 year old? Because he had $140,000 to cover any risk for the developer. It’s not like the developer gave a flying fig whether the kid could close. Welcome to grownup life kid. If the condo was worth a $million the kid would be a financial genius.
Yup … there are lots of folks that don’t realize that real estate can go down too & you can lose money on houses & condos.
Most have only ever seen prices go up and so home prices falling is uncharted territory.
How many of them only did 5% and got CHMC coverage?