Recently, I received an email that told me I can save “up to $100,000 on the courtyard collection!” at the Barker Block. That sounds like an amazing deal, but I can’t imagine this offer comes without a catch.
So, I went to my homie in the ‘hood, my dude in downtown, my man in the mortgage, my lad in the lofts, my mate in the market, my friend in floorplans, my pal in pricing, Mr. Developer.
Big Al, the gal: Good sir! I’m pretty sure Barker Block isn’t just going to hand me a $100,000 check. What gives in this situation?
Mr. Developer: They were previously having an 18% off incentive campaign (about $90,000 off on a $500,000 condo). They have had minimal sales from this earlier promotion. Now, they are stepping it up and offering $100,000 off some units b/c they are just not selling them.
Big Al, the gal: What’s in it for them?
Mr. Developer: They want to generate some sales and build some momentum. They have about 65 units to sell and have to make something happen so they can pay off their construction loan.
Big Al, the gal: What’s in it for me?
Mr. Developer: You get an even better price on your unit than if you had bought a month or 2 ago.
Big Al, the gal: If they lower their prices $100K, aren’t the units still overpriced?
Mr. Deverloper: The market will decide that. If they don’t sell them with this offer, then they are still overpriced. If they get some traction, then maybe they are close to the correct price point.
Big Al, the gal: What’s the catch? How could I stumble upon a pitfall?
Mr. Developer: We’ll prices could continue to fall regardless of this new incentive.
Big Al, the gal: Say I bite. Knowing that no one throws $100K at me if they aren’t struggling, what if they decide to convert some units to apartments? Would that flush any value the unit may have had down the toilet?
Mr. Developer: This is a possibility. They could start to rent out some of the units to renters who don’t have the pride of ownership that buyers have. The community could suffer from renters and from further price drops. Also, living with renters is less attractive to a buyer if you then want to sell and get out.
Big Al, the gal: Is there any way to know if a developer is considering turning some units into apartments and avoid that project?
Mr. Developer: You should ask the sales agent and try to get it in writing. Other than that, you have no way of knowing the developer’s intention.
Big Al, the gal: I know some folks are already living in their condos at Barker Block. What happens to them with this offer? Are they just out of luck?
Mr. Developer: They can pressure the developer to give them the same deal, but if they’ve already closed, then a deal is a deal.
Photo by mischaka269
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