Here’s Why Michael Scott’s Condo Was a Terrible Investment

Michael Scott is many things –– a master of jokes, an optimistic and painfully generous boss –– but there’s one thing he can’t get right. His finances. Throughout the series, we witness Michael’s careless financial attitude. The first and biggest financial misstep he makes in the show’s entire run was buying a condo (Season 2, Episode 3, for those who want to rewatch it.)  Hang in there; we’re unpacking a lot here. 

Michael didn’t understand his loan

Buying a home is one of the most significant decisions you’ll make. Understanding your interest rate and your loan terms is essential to ensure a smart money move. Throughout the episode, Michael’s ramblings tip us off that he didn’t really know what he was getting into. 

During the final walkthrough of his condo, Michael reveals the depths of his ineptitude. When Dwight asks him what mortgage he got, Michael tells him he got a 10-year mortgage. Which was quickly proven to be false when Carol, the realtor, corrects him with “ten years fixed, over thirty. Thirty year total.”

“The scariest oversight, in our opinion, is that Michael didn’t even know what type of loan he secured. Monthly payments on a 30-year adjustable rate loan would be hugely different than on a 10-year loan,” says Glenn Brunker, president, Ally Home. Picking a 30-year mortgage wasn’t the mistake. These terms are pretty standard. His mistake was not understanding the difference. 

He hadn’t done his due diligence

After Dwight spotted a few carpenter ants and pointed out how noisy the neighbors were, we had to wonder if Michael did any research before picking his home. During the due diligence period, the buyer sets up the inspections needed to feel confident in buying the home, including things like a pest and general home inspection. It’s evident that Michael didn’t do ant diligence, or he wouldn’t have been so surprised on closing day.

He almost left money on the table

“When Michael tried to back out of his condo purchase at the last minute, he didn’t realize he’d be responsible for the $7,000 he placed in earnest money,” says Brunker.

In case you’re wondering, there’s this fun deposit known as earnest money that you pay to go under contract on a home. It’s what takes your home off the market and secures it from someone swooping in and buying it out from under you. There’s a catch, though. If you walk away from your house without valid reason –– like major problems with the home –– you will lose that money if you back out. 

[ Read: 15-Year or 30-Year Fixed Mortgage: Which Is Right for You? ]

“The fact he wasn’t aware of how he could lose if he backed out of the sale at the last-minute shows what little research he put into the home buying process,” Brunker adds.

Michael likely wasn’t listening to Carol the first time she explained what the earnest deposit was. But he did pay attention the second time when she told him he would lose $7,000 if he walked away.

His finances were a tangled mess 

“One of the first things a buyer needs to consider is whether they can comfortably afford the new home in addition to their other financial obligations,” says Brunker. 

We can assume Michael didn’t start his search with this in mind. He’s recklessly impulsive and likely didn’t consult any financial professional — or even Oscar — before he started looking. This means he ran the risk of taking on more home than he could afford when other bills drained his account at the end of the month.

[ Read: Compare Best Mortgage Rates for 2020 ]

“Remember the total cost of homeownership includes insurance, taxes, utilities, HOA fees, and regular maintenance, plus funds set aside for occasional repairs when needed, all in addition to the monthly mortgage payment of principal and interest,” Brunker adds.

The icing on the cake for Michael’s evident lack of planning is when he tells Dwight, “I am going to let you move into my third bedroom and pay me rent.” It’s doubtful that he started looking for a condo with the intention of charging rent, it’s another huge red flag that he was looking for a roommate, once he closed on the house. 

Michael was in it for all the wrong reasons

“Michael’s key consideration for where he chose to purchase a home was that he couldn’t be the most attractive person in the neighborhood,” Brunker recalls. 

[ Read: Make Sure You Avoid These 6 Mistakes When Getting a Mortgage ]

His exact words were, “There’s a basic principle in real estate that you should never be the best-looking person in the development. It’s just sort of common sense because, if you are, then you’ve got no place to go but down.”

We know it’s a comedy, but this would be a major red flag under any realistic circumstances. There are a lot of factors that help people find their dream home. But do us a favor, don’t buy a home based on frivolous needs – or for the sake of attractiveness. 

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Image Credit: NBCUniversal Collection/ Getty Images

Taylor Leamey

Personal Finance Reporter

Taylor Leamey is a personal finance reporter at The Simple Dollar who specializes in personal loans, student loans, mortgages, renters, and financial policy. Her reporting has also been featured at,,,, and elsewhere.

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  • Andrea Perez
    Andrea Perez
    Personal Finance Editor

    Andrea Perez is an editor at The Simple Dollar who leads our news and opinion coverage. She specializes in financial policy, banking, and investing.