The 3 Million Dollar Home for 1 Million - Or not

Earlier today, I attended a breakfast meeting and one of the highlights was a discussion about the deals that people can find in today's "market." In this case, this seasoned real estate professional shared with the group that a friend of hers recently "stole" a $3,000,000 ocean-front home in Charleston, SC for just $1,000,000. What a deal, right?

My comment was that her friend was now the proud owner of a $1,000,000 home, not a $3,000,000 one.

See, I don't understand the mentality (delusion) of some consumers (no offense, Louise). Isn't it like someone proclaiming to have purchased GM stock for 63 cents and stating that they just got a deal considering (at one time before electricity) it used to be $93 per share? Kind of. Meet the new owner of GM stock at 63 cents a share.

I have a great story that captures the true essence of my argument.

Two weeks ago, I sold a double-wide trailer. Don't let the mental imagery fool you. It was a NICE double-wide. It was actually used as a New Home Sales Center on a new construction site and it was no longer needed. I had invested close to $100,000 in upfitting the trailer - new roofing, siding, front porch, paint and furniture. Given the current market for double-wide sales trailers, I knew I couldn't get much more than $30,000.

Boy was I wrong.

I received one offer at $15,000. I took it. Cash deal. The story gets better.

The (proud) new owner was in the process of moving the trailer to his property when the trailer hauling the trailer jackkniffed. Disaster ensues. The trailer is demolished. Total loss. You can imagine my surprise when the new owner called me and calmly requested that we modify the sales agreement. You see, he was about ready to file an insurance claim for the total loss. His zaney idea was to increase the purchase price from $15,000 to $30,000. This way, he'd be able to purchase another trailer with the insurance company's money. After all, $15,000 doesn't get you too far in the way of trailers.

Here is someone who thinks he purchased a $30,000 trailer for $15,000. He didn't. He purchased a really nice, well appointed, first-class trailer for $15,000.

That's how the market works.

And no, I didn't acquiesce to his request.

Bankruptcy is Immoral

I know it's a bold statement, but it's a bold move, too.

First, I am very clear about the legal rights afforded to businesses and individuals as it pertains to filing for bankruptcy. Second, I also realize that some people have no option but to file. When you have NO money and no way to pay for things by which you are obligated, you are left with no other options. As a tactic, filing for bankruptcy is not immoral.

However, refusing to pay (more like re-pay) the creditors consistutes an immoral action.

I completely understand one's inability to repay a debtor in the NOW world. But what about next year? Or five years from now? Or fifty years from now? Therein lies the moral aspect. Because one who chooses and succeeds in filing is saying to the world, "I can't pay you now. Please forgive me. Oh, by the way, I am choosing not to pay you for the rest of my lifetime - even when I can afford to do so."

As more and more Americans resort to the strategy of bankruptcy, the once-strong moral fibers of this nation weaken. Future generations will look back and recognize The Great Recession was a moral one.