From today’s Washington Post:
To ease buyers’ worries about declining prices, Mid-Atlantic Builders will adjust its sales contract if the price it is charging for one of its houses falls from the time a customer signs an agreement to 45 days before settlement. So, the thinking goes, jittery buyers shelling out $500,000 to more than $1 million for one of the builder’s single-family houses can rest assured that they’re not sinking money into a depreciating asset.
This would be of great benefit to potential buyers of condominiums, currently under construction. Your greatest fear is that the developer, under pressure, will dump all the remaining units on the market, at a much lower price, over the coming months, after you’ve locked in a higher price. That would blow.
However, thinking about it, I don’t think it’s really enough that you get the lowest price offered, before you close. Really, you need a guarantee that you’re getting the lowest price, until all the units are sold, even those that are sold well after you close.
Over at Parris Landing, for example, early buyers basically paid full-price, end of story.
Now, a year later, the developer is offering a year’s worth of condo fees (worth about $6,000) and a $5,000 closing cost bonus.
If I was an early buyer, I’d want those concessions (by personal check, please).
Yes, it’s not really the developer’s problem if you bought when prices were higher. However, consider the situation if it happened to you – if you have to sell, now, and the developer still has a bunch of units available, and those units come with an offer worth $11,000, which property do you think a buyer is going to buy?
More: Home Builder’s New Incentive: A Flexible Price – By Tomoeh Murakami Tse, The Washington Post