“Here’s my sorry tale. May 2007, broke and broken, yet still find myself buying a condo just to stay near my kids and g-kids. Bought 248K+10K cmhc (0/40/5.04%). May 2012, time to renew mortgage, owe 244.5K, panic. Sold Aug 2012, 228K.”

“An 8% price drop thus far sounds pretty accurate, from my own experience here in the burbs outside Vancouver.
Here’s my sorry tale…
◆ May 2007: broke and broken, yet still find myself buying a condo just to stay near my kids & g-kids, 248K+10K cmhc (0/40/5.04%)
◆ May 2012: time to renew mortgage, owe 244.5K, panic at being trapped in an impossible negative equity situation w shaky career, in desperation drop Garth Turner a note, blew off the (so nice, but so persistent) broker, swung into default open 6 mos @ 6.2%
◆ June 2012: tidied up, listed at 238K, added my red dot to the many for similar props @ ~245K, had about 10 showings, no offers
◆ 1st 1/2 July: no showings this month at all, decluttered like crazy, rented a storage locker & filled it, moved ‘puter desk out of LR, replaced faucets, carpet, light switches. Started buying fresh flowers weekly, learning fast how to really stage, working hard at keeping strong presence & interest on CL and KJ… and DS borrowed a wide-angle lens, took great pix
◆ 2nd half July: increased mortgage payments and started making’m weekly, dropped price to 233K, realtor hosted open house w 6 visitors, I put out good coffee & cookies, stopped shy of offering free beer for a year
◆ 1st half Aug: did up my own colour flyer, spread it around, had a handful of showings — hooray, they were repeats! Getting really good at cleaning, noticing and cleaning every smudge, repairing every little crack and crevice, spit’n polishing for >2 hrs before each showing (yes, productivity at work suffered, but they understand. My spirit’s still strong, careful to eat well, exercise, etc.)
◆ mid Aug: Realtor (who promised a commission cut) leaves on vacation w a note saying he’s back at end of month, another guys covering in his absence, and to expect an offer from last viewers this Saturday. Narry a call or text or email from anyone on yay Saturday. Sucked into a few days of despair, palpitations, nightmares, losing it…
◆ THEN: another viewing (again a repeat), followed by an offer
◆ ….and SOLD at 228K; subjects lifted on Aug 25, completion end Sep.
◆ NEXT: Selling scheit on CL, moving into a little basement rental @ $500, much closer to work, further from family, nose to grindstone to pay down closing costs debt (>20K). Learning to drive the money road, will be moving my truly pathetic little RRSPs out of GICs, starting up a TFSA, when I have enough, start looking at things like REITs and bank preferreds… strange new lingo for me, new territory, trepidation and HOPE and FAITH that things will all work out in the long run.
Cheers, you know this story; it’s just one of many idiot ones you’re hearing — worse ones to come in the not-distant future.
And to you dear newcomers, especially pathetic idiot (but not hopeless) single women like me: Listen and LEARN. Believe that there is no one perfect answer, that we’re living in somewhat unpredictable times. Be liquid enough to be able to adapt to sudden changes in our economic, political, military, and climatic (earthquakes anyone?) environment.
It’s all starting to make such perfect sense.”

aggie, at greaterfool.ca 31 Aug 2012 11:27pm [hat-tip ‘AP’]

26 responses to ““Here’s my sorry tale. May 2007, broke and broken, yet still find myself buying a condo just to stay near my kids and g-kids. Bought 248K+10K cmhc (0/40/5.04%). May 2012, time to renew mortgage, owe 244.5K, panic. Sold Aug 2012, 228K.”

  1. Wait… was this a “home” or an “investment”?

  2. another phantom post planted at greaterfool. I’m sure this happens – but this one is phoney

  3. I hope that she is able to turn things around. The post does bring to light that the author appears to have very, if any, knowledge of financial investing or management. This is a big problem with our society, complacency in this area and all too willing to put our money and trust in the hands of others. We all work hard for our earnings and so many seem to be willing to hand it over to someone who simplay says “Don’t worry, everything will be fine.”

    • I know. This talk worries me: “…when I have enough, start looking at things like REITs and bank preferreds”. At this stage, I think maybe she should be looking at index funds and crossing her fingers.

  4. Once again, the weak, marginal players mark a lower price for the market. I am sure most of her neighbours have no need / urge / desire to sell, and would not feel financially impacted by the lower market price. Still, doesn’t mean the newcomer doesn’t get to enjoy the lower price… until another lower price shows up.

  5. Yellow Helicopter

    Fascinating anecdote, thanks for posting VREAA. I will be the first to admit that I could have had a similar tale, (although not with a 35 or 40 year mortgage – does no one look at the interest tables?! – sheesh) if I had never first read that Cam Good ‘millions of millionaire Chinese are coming – buy now you lazy got or be priced out forever’ piece of dung in the Vancouver Sun a couple of years ago, and then ripped it up and flung it across the room.
    And in a funny way, maybe I have to thank Our dear friend Cam, who at that point I had never heard of, because if it wasn’t for him I never, out of complete frustration and incredulity, would have found VREAA, Vancouver Condo Info, Greater Fool, etc. I turned to the ‘net, and found all of you, and learned so much-
    About the housing market, about average debt levels, about investing, and more. And I finally felt okay about not buying, and not just okay, but that i wasnt alone. And am learning how to manage my own money. nSo this is a thank you to all of you.

    • terrible grammar and a racist!

      • Yellow Helicopter

        Sorry about the grammar; I was typing on my phone and the combination of phone type and autocorrect didn’t serve me well. But a racist?? Absolutely not! I was frustrated with Cam Good and his attempts to mislead average Vancouverites, and talking about rich chinese buyers was the gist of his opinion piece. I myself am an immigrant. I am grateful to Canada and most canadians for being so welcoming to people from all around the world. I particularly like and respect the Chinese culture. Racism couldn’t be farther from the truth. Thank you for allowing me to clarify.

  6. Good trade. Don’t worry too much about the investment instruments yet. On 10k the annual difference between 6% (awesome) and 2% (boring) is $400. That’s like one of the weekly mortgage payments.

  7. Not to be mean but if she diversifies into bank preferred and REITs in the 6 to 18 months as Garth recommendes, she might be taking another bloodbath in 2 to 4 years time from either one of the following:
    1 – Economy goes well and interest rate normalizes back to say 5% or 6% and those preferred shares and REIT will drop in price like a stone as their yields have to go up and maybe also lose yield/income chasing investors.
    2 – Economy tanks and bank and REIT profits goes down the tubes which means less payouts and preferred shares and REITs starts skipping dividends and price drops like a stone. Some preferred may have the cumulative dividend feature which might help.
    3 – Economy muddle through like they are now lurching from crisis to crisis, chances are preferred and REITs prices will trade in a big range and she’s still like to lose money.

    • Garth may well be too confident about the banks. But holders of preferred shares are in line for dividends before owners of regular shares, right?

    • space889 – It is true some preferred shares can be risky when rates are expected to increase. However, this can be avoided by choosing preferred shares that have their rate reset or other options. Preferred shares should not bought with the intention of selling but for long term income. You can also choose a preferred share with a higher or lower priority but all are higher priority than common shares.

    • space – agree with your cautionary comments about following Garth’s advice. It seems like his recommendations would best suit those with a few hundred K, who could live off the generated income even if there’s a significant capital loss.

  8. Since the discussion is about investments…

    I just read this eye-opening book by Vancouver native Andrew Hallam. He’s a 42 y old teacher living in Singapore and became millionnaire before the age of 40.

    http://www.amazon.com/Millionaire-Teacher-Wealth-Should-Learned/dp/0470830069

    He became rich by investing most of his monthly salary in ETFs every month for the past 20 years. Great read.

  9. Sounds like another person chasing yield. Best balance is still in corporate bonds. At least if things go bust you don’t get wiped out like the common and preferred shareholders. I’m buying US priced bonds to take advantage of our exchange rate. GIC rates are a joke. Ladder your bonds and keep some stuff liquid.

    • Just curious: are you referring to bond ETFs or actual bonds themselves? If the latter, what’s an example of companies that you are buying?

    • ^^ no doubt. There are not very many investment grade bonds out there (US included) that are actually yielding much above a 5yr GIC ladder – and you take on all the risk of currency fluctuations, bond price fluctuations, and interest rate changes.

      Either you are investing in non-investment grade (BBB or lower) to get higher yields which comes with risk, or you’re looking at the coupon and not factoring in the premium you (likely) paid, thus lowering your yield. Or you bought long term bonds, which are likely to experience a price collapse when interest rates go up in a few years in the US.

      You can build a 5yr GIC ladder that yields ~2.3%. Its not great, but given that its risk free, its not bad.

    • We could well be in the midst of a major bond bubble right now.

  10. One of the good stories. And if on the off chance, it wasnt legit, there were probably half a dozen just like her that are

    It is really such a sad situation, and from now the stories will become worse and soul destroying. The storys in 12 months time will be far worse.

    Yes the market needs to correct and big time and it will. But there have been hundreds of people trying to warn people not to get into bad situations

  11. Whether or not this story is legit really does not matter……FWIW though, I fully believe that it is true. So here’s why it’s legitimacy does not matter one iota.

    It is a scenario that a few hundred thousand Canadian “home owners”…..ROTFLMAO !! gawd I laugh at that term……..are facing right now and will have to deal with in the coming years as the RE market continues it’s slow downward slide. Here in Calgary if you watch the market for 6 months will become obvious what is happening and how it will play out…….but I have been watching the market closely for 6 years now. I am also not going to bother getting into the CMHC, zero down, , 40 year mortgage factor either for it has been played out here a thousand times and we all know what it’s impact has been.

    As we’re talking investment returns, 85% of money is in exchange traded sovereign bonds generating a 10% annual coupon (my annualized return counting yield is 11.3 %), domiciled in a 15% tax bracket. Sure it’s risky, but unless Brasil literally goes under between now and January 2014 it has been the best financial play of my life, over the last 9 years. Me thinks that while Garth is smart, he also harps too much about the banks here, whom I think are screwed just as bad as the US banks were during the start of their implosion. Their time is coming…….this past week was the apogee of their earning curve IMHO……..and it’s all downhill from here.

    Personally speaking, I am a discple of Mish, Max Keiser, Peter Schiff, et al, and of course my own economic analysis………and that last aspect has done very, very, well for me this last decade.

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