Give a man a fish and you feed him for a day.
Teach a man to fish and you feed him for life (and his wife will hate you forever – sportfisherman's joke).
Recently on personal finance blog the author of the blog said he and his wife have agreed to sell their house to a poor family (not mentioned how "poor" is defined). This family has always wanted to live in a house but can't afford to buy one at market prices.
So how can they be buying this house?
The blogger and his wife have agreed to sell the poor family the house for $20,000 to $30,000 less than actual market value. In other words, they are willing to take a steep loss on the sale of their house just so these "poor" people can afford to buy it. Exactly how the poor family is going to get the money to buy the house even with the $20-$30k reduction in price isn't stated.
On the surface many people will have the knee-jerk reaction to say something like "Aw! How wonderful they willing to help out a poor family!" or "It's great that some people still put others ahead of money" and crap like that.
People – THINK ABOUT IT!
Even with a $20-$30k price cut who's to say they can still afford the house? Possibly barely afford it. One snag or hic-up in their plan or the economy and they are in foreclosure!
Buying the house only the first step. There's annual property tax that always goes up several percentage points every year. How will they afford that?
There are insurance costs, utility costs, and as any home owner will tell you there are always unforeseen expenses that come out of nowhere. Appliances break. Pipes break. Roofs leak. Just to name a few. How will they afford that?
And let's be realistic too. The blogger doesn't say where the "poor" family lives now but I will guess an apartment. Going to a house they will want to furnish the extra rooms. That costs. And the poor family's wife will probably want to redecorate and get new furniture for her new home (call me sexist, I don't care, but what I said is true). They'll want big TV and stereo and all the other trappings that go with living in a house instead of an apartment. In other words, more expenditures.
How will they afford it?!
While I will agree the blogger's heart is good for wanting to help, the road to Hell is paved with good intentions.
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