> On 8/29/2011 3:14 PM, Jordan Hayes wrote:
>
> This is actually a very good example of what I mean when I say that
> risk
> wasn't hidden, it was just assumed away by expectations of house price
> appreciation.
>
recently, I learned that the appraisal for the house was more than the purchase offer. The mortgage broker wrote to say, "Woohoo! Now you have instant equity!"
This kind of amazed me because, uh, I made that low purchase offer because some of the military closings around here have meant people are trying to unload houses at 270k when they bought them 9 months ago for 320k. Sat in her office, signing loan papers, telling her that. We were oohhh and ahhing over the awful market.
In other words, what amazed me was how, in the midst of clear and obvious evidence that a house is only worth what a buyer is going to pay for it, i was still told I had "instant equity"!
i don't even want to know what words like that do to buyers who now think they have "instant equity"!!!!!
i can't even fathom what kind of frenzy went on during the boom.
shag