Selling a pre-sale unit

There’s a question in the forums about selling a pre-sale unit:

My husband and I bought a presale unit in a condo in Seattle six months ago fully expecting to move in when the building was ready. Now, for a variety of personal and job related reasons, we decided that we will be moving out of Seattle in the next few months. We’re wondering what to do about the condo. We can’t afford to buy it and rent it out as an investment, we would probably lose a lot of money paying RE commisions and taxes if we sold it immediately after closing, and walking away from the earnest money would wipe out most of our hard-earned personal savings.

Thoughts?

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Matt , Urbnlivn's publisher, has a love for lofts with industrial features and new construction condos that is only eclipsed by his passion for outdoor sports and urban living. Phrases such as “polished concrete” and “exposed brick” are music to his ears. You can also find Matt on Twitter or skiing.

  • manamongbabies

    You may want to consider trying to find a buyer before you close on it. Many people have been able to write a contract “subject to a successful closing” for a purchaser to buy it from you as soon as you close, aka a dual closing. Another option that’s tried & proven is to find someone who wants to buy the unit, add them to your P&SA so you close with them on your title. Have them get the loan in their name, & have them give you a refund for your earnest money before you close. Then as soon as you close QUITCLAIM it to them- a simple form & $10 charge at any title company. Only one closing happens & they will already be on title & loan. Have them pay the closing costs & loan origination fees, since they will end up owning the home. By this method you at least end up not losing anything or ending up stuck with having to list & sell a home!! Simple!!

  • Foster

    Okay, now I will say something.

    Jo advised on July 20th: “My advice: goto the developer. If the unit is worth more than you paid for it, they will gladly let you out of your contract. Its free money to them.”

    This is certainly not always the case. I know of a builder here in town who sold a unit to someone on opening day of presales, and then when the person found out they were unable to stay in Seattle and would be moving, the builder offered to MAYBE let the person out of the contract, but only if they got to keep his earnest money.

    Bear in mind that this unit will surely sell for more, and its not like the builder has been damaged in this case. The building is still about 20 months away from completion.

    So in effect, this is an example where the builder would NOT choose to do the right thing, and would simply try to shaft you. They wish to keep the earnest money, and then sell the unit to another buyer for likely more money.. and get their earnest money as well! True, the builder has a contract and presumably has the right to keep the earnest money, but its obvious the buyer isn’t backing out to run to another project or something.

    This particular case is ongoing, and it will be interesting to see whether the builder makes the right choice. My understanding is that this person is growing quite weary of the builder’s antics. I don’t quite understand why a builder would choose this path, because as most urbnlivn readers know, word spreads fast in the Seattle condo community.

  • Foster

    Okay, now I will say something.

    Jo advised on July 20th: “My advice: goto the developer. If the unit is worth more than you paid for it, they will gladly let you out of your contract. It’s free money to them.”

    This is certainly not always the case. I know of a builder here in town who sold a unit to someone on opening day of presales, and then when the person found out they were unable to stay in Seattle and would be moving, the builder offered to MAYBE let the person out of the contract, but only if they got to keep his earnest money.

    Bear in mind that this unit will surely sell for more, and its not like the builder has been damaged in this case. The building is still about 20 months away from completion.

    So in effect, this is an example where the builder would NOT choose to do the right thing, and would simply try to shaft you. They wish to keep the earnest money, and then sell the unit to another buyer for likely more money.. and get their earnest money as well! True, the builder has a contract and presumably has the right to keep the earnest money, but its obvious the buyer isn’t backing out to run to another project or something.

    This particular case is ongoing, and it will be interesting to see whether the builder makes the right choice. My understanding is that this person is growing quite weary of the builder’s antics. I don’t quite understand why a builder would choose this path, because as most urbnlivn readers know, word spreads fast in the Seattle condo community.

  • Shawna

    I don’t get it. If you put down earnest money for a purchase and then back out of the contract… you lose your earnest money. Pretty simple. I understand that you want the developer to have a soft heart for your extenuating circumstances, but that’s not how the business world works. You signed a contract, broke the contract and now want the developer to give you a big hug and say it’s ok? I don’t think so! We have all had to learn a lesson in life. Some are harder to learn than others. Consider this yours.

    As for this particular developer, Wysong has been more than accommodating to me. I bought the condo back in August contingent on the sale of my home. My first offer fell through leaving me to make a decision on whether or not I wanted to keep my earnest money on this particular condo. After looking at other condos in the area it was clear that none of them compared to the Press. The developer extended my contract until the home finally sold. It seemed like forever, but I was finally able to move in sometime in March.

    This was one of the best purchases I have ever made. We are truly a community here at the Press. I can’t say that for many of the other developments in Seattle. After looking at many other condos in the same price range I was thrilled to finally find the Press.

  • Shawna

    I don’t get it. If you put down earnest money for a purchase and then back out of the contract… you lose your earnest money. Pretty simple. I understand that you want the developer to have a soft heart for your extenuating circumstances, but that’s not how the business world works. You signed a contract, broke the contract and now want the developer to give you a big hug and say it’s ok? I don’t think so! We have all had to learn a lesson in life. Some are harder to learn than others. Consider this yours.

    As for this particular developer, Wysong has been more than accommodating to me. I bought the condo back in August contingent on the sale of my home. My first offer fell through leaving me to make a decision on whether or not I wanted to keep my earnest money on this particular condo. After looking at other condos in the area it was clear that none of them compared to the Press. The developer extended my contract until the home finally sold. It seemed like forever, but I was finally able to move in sometime in March.

    This was one of the best purchases I have ever made. We are truly a community here at the Press. I can’t say that for many of the other developments in Seattle. After looking at many other condos in the same price range I was thrilled to finally find the Press.

  • Joel

    Maybe “Don’t buy stuff you cannot afford” should be “Don’t buy things that don’t exist yet”.

    Jo:
    “they simply have to relocate which means to keep their unit in Seattle they would have to pay two mortgages.”

    Who ever said anything about two mortgages?

  • Joel

    Maybe “Don’t buy stuff you cannot afford” should be “Don’t buy things that don’t exist yet”.

    Jo:
    “…they simply have to relocate which means to keep their unit in Seattle they would have to pay two mortgages.”

    Who ever said anything about two mortgages?