Developer offers discounts to buyers of failed condos
Brickell condo developer this week offered discounts of up to $21,000 to buyers
in projects that have failed - a step observers say mirrors a wave of offers
as condo-mania cools.
of units at Skyline at Mary Brickell Village may forgo payment of closing costs
- equivalent to 1.75% of purchase price - if their contracts or reservations
were cancelled at another development. The saving covers title and document
75% of the 369 units at Skyline, 900 SW First Ave., are sold, leaving about
90 priced from $400,000 to $1.2 million. That means savings of $7,000 to $21,000
for buyers in the 35-story project.
qualify for the discount, buyers must show proof of cancelled contracts or of
reservation with another development.
of the project is anticipated in mid-2008.
"I believe this is a wonderful opportunity for these individuals to still own a piece of real estate," said
Skyline Equities Realty general partner Evangeline Gouletas.
say this is one of many techniques developers are using to find a market among
buyers disappointed in other projects.
"The purchaser pays at closing a pro-rata share toward the creation of a condo association," said Michael Cannon, managing director of Integra Realty-Resources South Florida. "Several
developers are saying to their clients that if their contracts were cancelled,
they will pay the 1.5% or 1.75% fee."
also take other forms, he said.
"This is a foretaste of the marketing efforts that will be utilized to induce a sale," Mr. Cannon said. "Some
developers have moved to pay higher commission to brokers, which isn't always
advisable in a market that's squeezed. Some will provide decorating allowances.
Others pay closing costs up to a set sum, such as $3,000. This is all part of
the process as the markets stabilize and start to show more normal signs. There
are 20,000 units announced, planned or under construction in this area."
initiative isn't limited to buyers with cancelled contracts, said another key
"It's not just for contracts that are cancelled or stopped," said Ron Shuffield, president of Esslinger Wooten Maxwell. "Developers
are keen to waive the fees required to set up a homeowners association, and
it's probably wise to attract buyers from other closed projects. Most of them
are legitimate buyers who need to live somwhere."
said EWM has acquired purchasers for developments it represents from failed
"We are picking up business from some of the contracts that are cancelled," said
Mr. Shuffield, who said he found units for purchasers of Mets 1, 2 and 3, Toscano
and Downtown Dadeland. Others who were ready to move chose to buy at Marquesa
in Broward County, he said.
will use any conceivable method to avoid re-pricing, Mr. Cannon said.
"Prices will only drop when there is cancellation of contracts on a wide scale," he said. "They'll
do anything rather than reduce prices."