In December 2020 I had to put my home on the market and move 1,000 miles away. Two months before I’d considered refinancing my mortgage and the bank gave me a valuation of $285,000. I thought it probably should have been higher but didn’t really feel like taking the time to look into it because I wasn’t really that worried about it.
Suddenly in December I was forced to worry about it. So I reached out to a realtor friend (an
actual realtor, not a guy with a side gig) and asked him to give me an
estimate. He thought it would probably sell for about $305,000, maybe $315,000
tops. Again I was skeptical so I started
doing my own research. I looked at my community,
what was available in my county, what comparable houses were selling for and
taking note of the neighborhoods, roadways, schools etc. After all of that I
estimated my house was worth about $400,000.
I thought it could possibly sell for $415,000 or even a bit more.
We put it on the market at $405,000 and ten days later it
was sold with the buyers offering $395,000 and we eventually settled for
$400,000. I was confident it could have sold for more but exigent circumstances
made the logistics of waiting impossible, which is sad because had I waited 12
months to sell it I would likely have gone for $550,000, almost twice what I’d
been originally offered.
All of this to say that in the world of real estate there
are a million different factors that go into valuing something and based on
those criteria, there are likely countless different values that can be set on
a particular property. What’s more, values can be volatile particularly in the high
end markets.
Real estate, like most businesses, can be unpredictable,
sometimes very much so. Which makes what NY AG Letitia James has done to Donald
Trump so unconscionable. In the primary element of James’ indictment:
“’Trump and his company used “false and misleading” financial
statements, her lawsuit alleged, “repeatedly and persistently to induce
banks to lend money to the Trump Organization on more favorable terms than
would otherwise have been available to the company, to satisfy continuing loan
covenants, and to induce insurers to provide insurance coverage for higher
limits and at lower premiums.’”
One would imagine that some banks or insurance companies lost
money because they loaned money to Trump or trump defaulted on them. They did not. Indeed the loans were all paid
back, with interest. There were
literally no victims and banks
still wanted to lend to him!
But that didn’t matter.
The bottom line is that, according to James, Trump used one set of books
for getting a loan and another set of books for taxes. But that’s not how this
works.
When I was selling my house the county tax collector
assessed my home at around $200,000. It
had been that way for years. Indeed,
it’s very common, particularly in red states where they concern themselves with
controlling taxes, for the government assessment of the value of a property to
be substantially below what it might sell for.
That didn’t impact what I might refinance it for or what a buyer might pay
for it. In those cases the lender sends
someone out to do an inspection and then comes to its own conclusion as to what
value it would be willing to assign the property for the purposes of a
loan.
The point here is that Trump was simply doing the same thing
that millions of homeowners and businesses do every single day across the
country. They make the best case scenario for the value of their property of
business while knowing that a banker or lender is going to make their own
determinations before deciding how much they will lend.
That’s business. Valuations are just estimates and they can
be all over
the map in business. In 2000 Spanish
telephone company Terra bought the search engine Lycos for $12 billion. They unloaded it three years later for $95
million at a loss of 99%! Alternatively, in 1999 founders Larry Page and Sergey
Brin offered to sell Google to Alta Vista for $750,000. George Bell the CEO demurred. The company went public in 2004 with a
valuation of $23 billion and today Google is worth almost $2 trillion.
The point is, valuations are guesses, educated or otherwise and
everyone has their own perspective. But
James has taken this ordinary element of business and twisted it to try and
eviscerate the presidential campaign of Donald Trump.
And she might succeed.
First Judge Arthur Engoron came back with a guilty verdict and last
Friday he fined Trump almost half a billion dollars. And what’s worse, because
of course it’s New York, he may have to put
up the entire amount before he can appeal.
America’s justice system has been twisted into a hammer with
which to nail enemies of the swamp to the wall.
Not only have we seen the laughable election
manipulation case in Georgia, the ludicrous defamation
case in New York, and the on hold federal
election interference case, but we now have the justice system being used
to turn normal, everyday activities that millions of Americans partake in on a
regular basis and turning them into crimes.
And what’s worse, the system is set up such that if someone is deemed
guilty they essentially have to bankrupt
themselves in order to be able to seek an appeal. That’s the definition of
unjust. If this stands America as we know it is finished. You can’t unring a
bell and precedent is precedent. If this
works and Trump loses as a result of this judicial interference onslaught then
one would expect recriminations and counter recriminations. And it won’t just be
billionaire ex presidents who’ll be in the crosshairs, it will be small
businesses who don’t support local candidates, it will be big businesses
who threaten the elites and it just might be you and me for having written
something critical of some thin skinned politician somewhere or overestimated
the value of our house… None of that is good for a free republic.
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