Investors are always taught to be quick, like gunfighters in the Wild West, in order to stay ahead of competition. Sadly, this can occasionally lead to consumers ignoring what they are purchasing in order to get a quick discount. As a result, returning at least the initial investment is nearly difficult. Read this story to know what occurred.
so i’ll start by saying that this story is not mine; it is about my parents next door neighbor of 20 years.
background: my parents and their neighbor bought homes in an up and coming part of florida 20 years ago…talking 1/2 acre lots with 2500 square foot homes for like $130,000. Our neighbors’ home was a little smaller than my parents, no pool, and over the 20 years the only thing done to the house was a new roof. nothing else had been changed; everything was still the original – appliances, paint, ac unit, cabinets, tile and carpet. I wish I could say she took care of it and never needed to change things, but that wasn’t the case….our neighbors house looks 20 years old.
well she is a widow and the house is huge for her, so she decided to sell and take advantage of the market. She listed it for $400,000. Despite her never having put a penny into it, the house goes on a bidding war, and the top bidder is an investor from california. She offers to pay $30,000 over asking, pay the closing costs, and can do it the same day.
cue malicious compliance.
The investor woman had two stipulations: our neighbor takes the house off the market immediately, and she turns over the key to her management company with the cash for the home held in escrow until the key was turned over and our neighbor’s side of the paperwork done. Now our neighbor was upfront with this woman and the state of the home, and asked if she wanted to have her management company come look at it first.
the woman says “no, im renting the house and it doesn’t need to be painted. just pull it off the market!” This woman essentially bought the home for about $450,000 when it was all said and done.
so our neighbor immediately goes to the management company office with her realtor, signs her paperwork, hands over the key, and gets the check for the home.
A few days later…our neighbor gets a call from the investor lady. She is irate! The house is in disarray. it needs a paint job asap. new appliances and flooring at the least. she demands that our neighbor paint the house…she won’t take ownership of the home until that is done. to which our neighbor responds to her,” it’s not my home anymore. it was signed over to you and that the check was handed to me and cleared. that house is no longer my problem. enjoy!”
This story all came about because yesterday my parents called our old neighbor: there was a for sale sign on the house again and we were confused. Our old neighbor promptly showed up and told us the story and we were all laughing hysterically because the woman had it listed for $430,000 – which anyone with eyes to tour it would never pay, and even if she did get it…she’d still be losing a f$%^ ton of money.
Who doesn’t love a story when greedy investors trying to inflate the market lose and lose big?