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Give them a call. Better yet, call me to call them to find out more. Like, I could be your agent?
****** Okay, it took me about twenty seconds before I realized they aren’t really being altruistic or anything.
If you buy a regular condo, your bank comes out and appraises the property. If the property isn’t worth what you’re offering to pay, the bank will say, no. You’ll then need to renegotiate the price of the property, or, if you have it written into your offer, you’ll be able to back out of the deal. (Or, option three, you can simply kick in the difference, in cash, out of your own pocket.)
When you buy new construction, developers often say, no, we won’t give you a mortgage contingency. You’re on your own.
In a hot market, this is okay, because, even though a development won’t be ready for two years, you’d assume things are only going to get hotter, and you’ll be able to get the property appraised at its value.
Of course, this doesn’t help you out if you lose your job, and can’t afford to buy the condo, anymore.
So, all Avenir is offering to do is lower the purchase price, if the value of your condo goes down. Like they have a choice? If your unit doesn’t appraise out, your bank won’t give you the loan.
The bank has its own appraisers. Avenir is saying they’ll bring in up to three appraisers, to judge the value of your condo. If the bank appraiser’s value comes in less, you’d have to take the other three values and show them to your bank, in order to prove to them its worth the purchase price.
And, it’s not like they’re letting you out of the deal if it appraises for less. You’ll still be required to buy, of course.
And, of course, there’s still the chance that the developer, if faced with a glut of units, a year down the line, will lower prices on the rest of the units. (However, if this happens, presumably the value of your own unit will go down, and you’ll be able to pay less, then, because the appraised value will go down.)
Finally, when the bank goes out to appraise your condo, what’s it going to use for comps? There’s not much in the way of condos in that area. If the bank compares Avenir to Strada234, across the street, your unit will appraise for the purchase price. Strada234’s sales prices are higher than Avenir’s list prices, by far.
Plus, when you buy at Avenir, if other units in the building have closed, the bank will basically be comparing your unit’s purchase price to other units in the building, which might have inflated purchase prices, as well.
This is a good thing, what Avenir is doing. When you think about it, however, you’ll see it’s not out of kindness, but of necessity.
Bottom line, consult with an agent, prior to making an offer.