Back in November of 2004, a speculator put down a 50K deposit on a to be built single family house located in Fairfax , VA ( Northern Virginia, DC suburbs) . Stanley Martin is the homebuilder for this development. The 50k deposit included the usual deposit plus extra money for special options. The home would be built and settlement would occur in September 2005 for 1 million dollars. The plan was to then sell it a solid profit.
September 2005 came and the speculator realizes that the housing market has radically changed. The speculator came to his senses and decided NOT to settle (buy). Instead, he lost the 50K deposit.
Despite the 50k loss, it was still a wise decision to exit early. A 50K loss is better than a larger loss.
Friday, January 27, 2006
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