New Development Price Increases

The thinking goes that once enough units are in contract, the building will be seen as a safer bet by other interested buyers, so they'll pay more of a premium to buy in.

True, many developers do increase prices of remaining units when the building is almost ready for move-in. What I also see is that some developers take listings off the market and relist them 6-9 months later, probably due to a contract out that fell through or the developer deciding to hold on to those units until later based on market demand. In the meantime, there may have been one or more price amendments, and when the listing is put back on the market, streeteasy would show the new price increase on the date it's relisted, not the fact that it's been off the market for months. E.g. a listing that went on the market in 4/07, delisted in 5/07, and then relisted on 2/08 would should a price increase that may have been set back in May last year.

the developers and their broker agents are sharks . . . . 2 above posts are correct

whats even more amazing is the fact the most will not even negoiate transfer tax and closing cost's it's mind boggling

I think it's done because tanning salon rays have penetrated their skulls and softened their brains. They no longer know how to do business in ethical fashion.

I guess until people stop buying they can do whatever they want. They can raise their prices, they do not have to negotiate closing costs, and they can act like sharks.

I was recently placed an offer on a condo and called it off due to the fact that I found things in the offering plan that were not disclosed the brokers were acting like everything was normal and I better hurry up or I could lose the place. I walked away and the place is still on the market. It was tough losing the place but I stood on higher ground and felt so much better that they were not going to earn a commission behaving like they did.

I am getting ready to put an offer on another place, let’s see how this one goes. I am used to dealing in a professional environment so this is really annoying.

lajeep405, any hints as to what condo building this was?

The Cocoa Exchange

I am curious as to what was not disclosed by the brokers that you found in the offering plan. We are thinking of buying in a new development and would like to know what to watch out for. thx.

I'd say about half of the sell-side brokers I've met are lying sons-of-b!tches - making up fictitious competing bids, feigning ignorance of negative pertinent details and misrepresenting deal terms. I recognize their obligation to represent the seller, but there is a lot of really shady/unethical practices going on that is stereotypical of the used car salesmen as depicted on The Simpsons or Family Guy. I think that during the boom years, any dope with a cell-phone and a clipboard could list a property and get multiple-bids above asking price. But in today's market, the really bad brokers ("fast talking, Mr/Mrs Slick, tell-you anything you want to hear" brokers) are trying harder than ever, which only accentuates their annoying (sometimes dangerous at your expense) traits. In fact, I actually refrained from bidding on one apartment (even though I really liked it) because the broker was so full of BS I didn't want to risk getting stuck in a bad situation. Buyers really have to watch your own backs in today's market.

My apologies to the honest, straight-forward, non-sleazy brokers out there. I know it sucks to have so many sc-mbags ruining your profession.

Mom, you hit the nail on the head. As soon as I showed interest in the property the selling broker told me there was lots of interest, I then went back to make an offer and she told me there was a cash offer ahead of me and they were checking it out. My broker asked me if I wanted to up the ante up to trump the cash offer. Realizing that you would have to be a complete idiot to make a cash offer I called bullshit and said my offer stands as is and I would wait. Guess what! The cash offer did not pan out and I was up. It took a while to get the offering plan and while I was waiting I was getting the "I better hurry on this one" from both sides but of course I could not sign without me and my atty reviewing it. When I did get it, I noticed that the unit had lot line windows and was not a 2 bedroom as advertised. It looked like a 2 bed but it was not. I gut told me if they are playing that game then who knows what else there is.

mrsbuffet, I would find out if the tax abatement is in place, if not, you will have to pay the taxes until it is approved. No one has been able to give an answer if you get a refund or a credit to be used against future taxes (which would take a while to use). Another thing to worry about is the time between your deposit and when they finish. There is risk in this period if your financial position.

One more funny story. I called on a listing and the broker meet me at the property which turned out to be new development, the onsite broker took us up to the model and while we were looking around the broker who met me there used the bathroom in the model. I was so embarrassed. He called me the next day to tell me about some other properties and I told him he is fired. I am surrounded by morons.

I forgot to add a piece to the story, after I got the offering plan I was getting more pressure to sign and I was asked to make a decsion because there was a lot of interest in the unit. When I said no, I got an email a day later asking me if my decsion would change is they lowered the price. I did not want the place that bad so I said no. The BS never stopped from the mintue I said I was interested. The unit was taken off the market and relisted with another broker.

These people don't realized how stupid they sound when they say the typical broker lines. I think people spending a million dollars on a place are fairly educated people and can see right through that crap. Now when a broker tells me "this place has a lot of interest" I tell them I have never heard of a place that does not have a lot of interest. It is really hard not to be a smart ass when the BS start coming out of there mouths.

That being said, I have met few brokers that take a factual approach and them come off as being very professional. I always compliment them.

excuse the spelling errors, this conversation got me all fired up.

I would be even more upset if I were the seller/developer and I learned that my brokers were losing sales because of their incompetence/lack of professionalism. I'm in the hospitality industry and our business is to cater to people (no matter what the circumstance or personality). My company would go out-of-business so fast if we acted even remotely like some of these brokers. I always take a moment to acknowledge/thank the brokers to come across like straight-shooters. The dichotomy in this profession is incredible. But back to the topic of new development price increases:

Sometimes, developers have a particular unit or type of unit they want to sell before the others. They might then raise the price of a closely related unit in order to make the one they want to sell appear relatively more attractive. For example, if a new dev has a bunch of 2-BR's that have been sitting on the market, they might raise the price of the 1-BR's so that anyone on the fence would more likely go for the 2-BR...

...sons-a-b!tches.

"Hi I'm Al Harrington, president and CEO of Al Harrington's Wacky Waving Inflatable Arm Flailing Tube Man Emporium and Warehouse and real estate brokerage. Thanks to a shipping error, I am now currently over-stocked on Wacky Waving Inflatable Arm Flailing Tube Men and terribly overpriced apartments, and I am passing the savings on to yoooooooouuuu!"

Great reference! I was worried nobody would get it.

lajeep405, would you mind sharing which apartment number it was and from which company was the broker? Thanks.

sfo - i agree with you there. it's so frustrating to "negotiate" with the developers b/c it's still "their way or the highway".