Winning The Lottery: The Biggest Loser

If you had to win a lottery to buy your house, chances are that you might end up in foreclosure or short selling your house down the road. I know.

Read most recent article...

Phoenix home buyers, are you being realistic?

Are you a realistic home buyer? Is what you want in a home or a location even possible? There is some hard data to go on, other times you need to {gasp!} trust your agent.

Keep Reading...

Homeowners’ Survival Event – Phoenix homeowners in trouble?

Are you a Phoenix homeowner facing foreclosure or a short sale? Maybe you are looking at an increase in your adjustable rate mortgage?

Keep Reading...

We are #1!! Now please make it stop. PLEASE?

Lots of real estate agents and brokerages make claims to be “NUMBER ONE!” in all sorts of matters. Yet they rarely back those claims with data.

Keep Reading...

Fighting Fraud Is Part Of The Job – From the Title guy

Fighting fraud has become a big part of the job. We are not only protecting our company, but we are protecting lenders, buyers and sellers

Keep Reading...

Short Selling Your House: Making The Decision

Making the decision to short sell your house will at least make your stress level decrease. Generally speaking. Or at least keep you from choking someone.

Keep Reading...

MLS Photo Fail – Sellers, pay heed to your home’s pictures

Photos of your home are one of the major factors in a buyer choosing to see your home in person. Lousy photos can ensure your home doesn’t sell. Here’s a real winner…

Keep Reading...

The easiest way to avoid foreclosure in 2009-2010?

Make sure you didn’t buy a house in the Phoenix area in 2005-2006.

Ok, so maybe that is over-simplifying it a bit, but my eighty-two-year-old Grandfather has taught me that if you live long enough, you will see it all.

And I can now say with some degree of wisdom:

If you find yourself entering a lottery with a builder to buy a home, chances are you are going to experience a great deal of financial pain in the event that you “win” the lottery.

I hear from people who sit in our local “lottery winner” support groups who find themselves having to deal with difficult choices regarding the home they “won” now being worth less than half of what they paid.lottery

Back in 2005, it wasn’t all that uncommon for builders to take peoples names who wanted to buy a house and then pick a few each month who could have the privilege of buying one of their homes.

Our builder had the same problem other builders had – too many people wanting to buy a house and he wasn’t able to build them fast enough. So the builder set up a lottery and within 2 weeks, the builder had a list of 150 people who put down $5,000 to enter the lottery.

And each month, the plan was that he was going to “release” 3 available lots and pick 3 winners who could then vie for one of the three lots to build a home on.

The first month went by and my name didn’t get drawn.

“Oh no! This meant that next month, he was going to raise the price by at least $5,000!  What was I going to do if I didn’t win the next month or the month after that?”

Lucky for me, I didn’t have to wait long – somehow the magic ping-pong-ball-chute shot my lucky number out in month number two.

Sweet! Now all I had to do was plop down $75,000 as earnest money and a year later I could move into my new house.

And so it began.

I was in the process of short selling my house in 2010 and didn’t even see it coming.

I was excited!

I had just won the lottery.

Someone just failed to mention that winning that lottery meant you were going to be a winner — a winner in the biggest loser.

In hindsight, I have to kind of chuckle at the concept of entering a lottery to buy a home – but at the time, it seemed like something perfectly educated, sane people did. Heck, quite a few smart people I knew would just refinance their primary residence take the cash and enter a lottery for an investment property. Those people essentially just doubled-down on a pair of eights in blackjack – forget entering the lottery.

But now I know.

And if I live long enough to see another home builder hold a lottery for the chance to buy a home, you won’t find me standing in line buying a ticket.

Or anyone else who has lived long enough to have seen what happens to past lottery winners.


McHoodAbout the Author:Justin McHood calls himself a “Mortgage Commentator” and works for Academy Mortgage Corporation. You can find his loan officers at Ten Day Close and read more of his thoughts on the mortgage business on Zillow’s Mortgages Unzipped Blog. You can also find him at most East Valley Friday Nights gatherings. He’s the one in the blue shirt.


 

Email This Post Email This Post Print This Post Print This Post

 

Phoenix Homes Search

 

{ 8 comments }

Phoenix home buyers, are you being realistic?

March 15, 2010 12 comments

Are you a realistic home buyer? Is what you want in a home or a location even possible? There is some hard data to go on, other times you need to {gasp!} trust your agent.

Read the full article →

Homeowners’ Survival Event – Phoenix homeowners in trouble?

March 12, 2010 4 comments

Are you a Phoenix homeowner facing foreclosure or a short sale? Maybe you are looking at an increase in your adjustable rate mortgage?

Read the full article →

We are #1!! Now please make it stop. PLEASE?

March 9, 2010 57 comments

Lots of real estate agents and brokerages make claims to be “NUMBER ONE!” in all sorts of matters. Yet they rarely back those claims with data.

Read the full article →

Fighting Fraud Is Part Of The Job – From the Title guy

March 8, 2010 6 comments

Fighting fraud has become a big part of the job. We are not only protecting our company, but we are protecting lenders, buyers and sellers

Read the full article →

Short Selling Your House: Making The Decision

March 5, 2010 7 comments

Making the decision to short sell your house will at least make your stress level decrease. Generally speaking. Or at least keep you from choking someone.

Read the full article →

MLS Photo Fail – Sellers, pay heed to your home’s pictures

March 4, 2010 24 comments

Photos of your home are one of the major factors in a buyer choosing to see your home in person. Lousy photos can ensure your home doesn’t sell. Here’s a real winner…

Read the full article →

Customized Short URLs: Brand your links on Twitter, SMS, Facebook, etc

March 3, 2010 16 comments

Using Google’s Short URL application to branded shortened URLs. It’s pretty painless. And it’s free. The question of course, is does branding a short URL really matter?

Read the full article →

The seller didn’t submit my offer to the bank on a short sale…

March 1, 2010 19 comments

From the Ask the Broker files: I put in an offer on a home that is in short sale, but the owner refused to submit my offer to the bank.

Read the full article →

Thompson’s Realty Turns Two Today!

February 27, 2010 27 comments

Wheeeee! It’s birthday time for Thompson’s Realty. Two years isn’t very long, but a lot sure has changed in the last 730 days. . .

Read the full article →

Thinking About Short Selling Your House? What No One Will Tell You.

February 25, 2010 16 comments

When short selling your house, make sure that you know that it will be hard on your relationship. Short selling your house is very stressful – and chances are your wife will want to kill you at least once during the process.

Read the full article →

$8,000 (or $6,500) Home Buyer Tax Credit – Extended Again?

February 22, 2010 22 comments

Will the $8,000 tax credit be extended yet again? Lobbyists are hitting the hill as we speak. But Senator Isakson’s office says he has no intention of introducing legislation to extend the credit…

Read the full article →

Can I get proof of a competing offer? The answer may surprise you

February 20, 2010 113 comments

Buyers often want proof that other offers have been submitted on homes they are interested in. This can be problematic for many reasons as outlined in this article…
GREAT discussion happening in the comments here!

Read the full article →

Thompson’s Realty Welcomes Dean Ouellette!

February 17, 2010 18 comments

Thompson’s Realty is thrilled to welcome agent and video blogger wizard Dean Ouellette to the brokerage! You need to get to know this guy…

Read the full article →

Let’s Take a Big Giant Step BACKWARDS in Real Estate

February 14, 2010 50 comments

From DEEP in the WTF? files: A group of leading N.C. Realtors hopes to change part of a rule that protects homebuyers from having their search guided by their real estate agent’s financial interests.

Read the full article →

Why I love my job. Real Life Real Estate Emails

February 12, 2010 23 comments

“You guys in real estate have had it good for too long and your industry is lazy, inept and inefficient.”

Huh.

“Let me know if you want to work with us.” Uh, no thanks.

Read the full article →

Thompson’s Realty welcomes Jason Geroux!

February 11, 2010 8 comments

We’re thrilled to welcome the newest Thompson’s Realty agent, Jason Geroux! Jason is a great guy, who brings a variety of real estate experience, including Property management. Welcome!

Read the full article →

Do I Need a Real Estate Attorney? Maybe, maybe not.

February 9, 2010 3 comments

From the “Ask the Broker” files comes a great question — do I have to use a real estate attorney? The short answer, in Arizona at least, is no. But short answer isn’t always best… Maybe you do. Maybe not…

Read the full article →

Phoenix Historic Homes: Upcoming Neighborhood Tours

February 8, 2010 4 comments

Two Phoenix historic home districts are having tours this month. Visit the Willo historic district or the Brentwood (Coronado) historic district. Or both!

Read the full article →

The Loan Package Dissected

February 5, 2010 9 comments

Ever wonder what that mountain of paperwork that comprises your home loan package is? Bill Risser dissects the carpal tunnel causing pile with an explanation of each document…

Read the full article →