This weekend the Seattle Times has a lengthy article on Getting the right floor plans, amenities and views by buying a presale. The most interesting bit for the new condo pre-sale shopper is the discussion of the differences between reservations and earnest money deposits. Some other choice quotes:
About 90 percent of condominiums at 2200, a mixed-use development in Seattle, sold before the sales center was open for business, said Julie McAvoy, sales director.
“It’s almost rendering sales centers a thing of the past,” said Dean Jones, president of Realogics, a Seattle-based marketing firm for condominiums and mixed-use buildings.
Ugh, I think it’s irresponsible and reprehensible that condo developers engage in this practice. For instance I couldn’t believe that Brix was accepting reservations the minute they opened their doors. The same goes for the development where I bought, the Meritage. They’re trying to create a frenzy where buyers are rushed to buy without really understanding what they’re buying. I think a customer friendly practice is to open your sales center for a month prior to reservations or sales beginning, build demand, and then put the units on sale. Give us a chance to absorb your floorplans, location, finishes. Don’t rush us to make a decision after camping out for four hours and then only briefly looking at things as we rush to find a sales associate.
The reservation stage, a more forgiving first step, allows developers to gauge interest in a project while it gives buyers a chance to select one of their top choices of units once the presale begins.
Translation: The reservation stage allows developers to gauge interest of a particular unit or unit type or floor so that they can raise prices before buyers sign a purchase agreement. As customers we need to stop playing into their hands with this one!
“As a homebuyer, you can be your own architect,” said Realogics’ Jones.
Customization may range from choosing among several themes to fully personalizing the unit, with the latter more common among penthouses.
That’s bullshit. A $15,000 car has more customization options than condos under $1 million. I hate that condo developers idea’s of customization is to choose between two or three color pallets. I can’t help but think how much money they are leaving on the table by not enabling customers to actually customize their units.
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2 responses so far ↓
1 carl // Oct 25, 2006 at 10:20 pm
I completely agree with your point about presales, but until buyers stop buying this practice will continue.
2 Peckham // Oct 26, 2006 at 9:57 am
“For instance I couldn’t believe that Brix was accepting reservations the minute they opened their doors. The same goes for the development where I bought, the Meritage.”
Believe it. If they don’t sell the units right now, the developers stand to lose a lot of money. It’s better to shift the loss to buyers who will pay way too much for units that will take a substantial hit over the next year or two.
The largest home prices drop in 35 years has just occurred nationally… and it’s coming to a neighborhood near you. The median price of a new home plunged in September by the largest amount in more than 35 years, even as the pace of sales rebounded for a second month.
From the Associated Press today:
The Commerce Department reported that the median price for a new home sold in September was $217,100, a drop of 9.7 percent from September 2005. It was the lowest median price for a new home since September 2004 and the sharpest year-over-year decline since December 1970. The weakness in new home prices was even sharper than a 2.5 percent fall in the price of existing homes last month, which had been the biggest drop on record.
The declines in prices served to underscore the severity of the correction in the once-booming housing market, which had seen sales of both new and existing homes soar to record levels for five consecutive years, propelled by the lowest mortgage rates in more than four decades.
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