There is always somebody on the other side of the deal, as this example from Slanty2D at Rob Chipman’s blog July.03.08 at 11:04am so clearly illustrates -
“I’m 35, bought my first house in 2000 (primary residence) in East Van for $290k, with a buisness partner bought another East Van house in 2004 for $420k (so I’m only 1/2 owner of second house). Saw the market SKYROCKET, so decided in fall of 2006 to sell the primary house. Sold for $840k (after everything about $600k profit). I made an agreement with the new owner that I’d rent the house back, so didn’t have to move. It’s now closing in on 2 years since I sold the primary house. I’ve invested my capital and done well, and I’m keeping one finger in the punchbowl with the 1/2 ownership of the rental house. The owner of what was my primary residence (where I am still currently renting) has tried to sell the house twice, and both deals have fallen through. He now says he’s resigned to keeping the house, even though it’s cash flow negative because he can’t sell it for what he wants. I’m watching the market, and am prepared to sit on cash for a couple more years to see what happens…maybe in a while if prices drop enough I’ll buy my house back and never have to move.”
And, if that comes to pass, the current owner will have lost an amount equal to the profits that Slanty2D gained.