“Specifically, the so called fraudulent money flowed from wall street/banks to naïve buyer to bubble seller. The bubble seller is the ultimate beneficiary of this fraudulent money, yet there is never talk about its morality or legitimacy. Fine, just don’t complain about govt giveaways of our tax dollars. You hold the solution. Simply return the fraudulent money and problem solved.”
“The moral obligation of the seller, of knowing the buyer will lose their life savings is entirely subjective as I previously indicated, based somewhat on your personal values. If someone offers me 4M for my 2M house, I ALWAYS have a choice. I could say yes, where do I sign meaning I want the money and your well being is no concern of mine. I could also say no, you are overpaying and I have some compassion for you even though I don’t know you. ”
These statements demonstrate a lack of understanding of the difference between price and value
When a sale occurs between two parties, they have reached an agreement on price
In most cases there is a disagreement in value or the sale wouldn’t occur – the seller believes the object being sold is worth the sales price or less while the buyer believes the object is worth the sales price or more
Another way of saying this is that price isn’t determined by value – it is determined by the intersection of supply and demand
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I sold my first property in 2002 because I thought the real estate bubble would burst at any moment
My assessment of value was incorrect at that point in time although the buyer and I agreed on price
Was I a ‘naive seller’ and the buyer took advantage of me?
Should I be looking for a government handout because I didn’t make as much money as I could have?
I made a bundle on that property – does that put me into your ‘evil bubble seller’ category?
The purchaser could have sold that property at any point in the next three years and made a bundle for himself
Let’s say he sold in 2005 – he’s now the ‘bubble seller’ in your eyes – should I still give back my ‘bubble profits’ as you suggest or am I off the hook now?
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What if the buyer in your $2M – $4M example knows that the city is about to redevelop the entire area – three years later the property is worth $6M – who’s the ‘naive’ one at this point? – the seller who, according to you, took advantage of a naive buyer; or the buyer who made a paper profit of $2M in three years?
