Nervous Condo Buyers Want Out

[Indigo Jill]

On a $1,000,000 interest only loan at today's rate of let's say 6.5%, you interest for the first two years will be $130,000, so in many cases, walking away from $200,000 isn't as bad as it might seem. In reality, you are walking away from $70,000 if you spread it over time. Plus, you are not in possession of a huge loan, condo fees, and a condo which will not sell at the purchase price for a while. All of the shake out will be interesting to witness.

I just can't imagine the level of anxiety that would go along with having to contemplate walking away from a $200K deposit or, conversely, having to come up with that kind of interest on an exotic loan knowing your preconstruction investment, at the time of closing, has lost that much in value (from the current CMA data). Realtors, have any real life stories of sellers who are in this position on the Emerald Coast? What are the majority of sellers here doing (walking or staying?)?

 

[Smiling JOe]

Yes, there are real life stories right here in SoWal, on a wide range of price points.

 

[Indigo Jill]

Yes, there are real life stories right here in SoWal, on a wide range of price points.

Are sellers trying to scapegoat and blame others for their bad decision or are they just panicking and kicking themselves in the arse?? Any lawsuits yet out of this? It will be interesting to see how this shakes out.

 

[Camp Creek Kid]

Are sellers trying to scapegoat and blame others for their bad decision or are they just panicking and kicking themselves in the arse?? Any lawsuits yet out of this? It will be interesting to see how this shakes out.

Why would the down market be the seller's fault? Most of the condos that are closing now have been under construction/in the planning and permitting process for several years. When presales were offered, at the height of the real estate boom, many projects sold out it days or hours. Buyers were all too happy to plunk down their reservation fees, many intending to flip. Most of the flippers couldn't afford to hold on to the property if something went wrong, and most probably never even considered the fact that they may have to hold it. It is the buyers, who bought to flip, who made bad decisions. The fact is that they signed a contract to buy a property. Sellers offered no guarantees that their condos would be worth "X" amount at closing. There is a lot of discussion about buyers walking away. While this may be possible with a RESERVATION, once a hard contract is signed, a seller doesn't necessarily have to let the buyer out.

The "sellers" or developers were providing a product that the market demanded. Nobody (but Shelly) could see this coming four or five years ago when most of these projects began. Real estate is an investment with risks just like any other investment. When the stock market takes a dive and someone loses hundreds of thousands of $$ because their stocks aren't worth what they were when they bought them, there is nobody to sue or blame (assuming there is no Enron-type scandal). Real estate is the same.

 

[Indigo Jill]

Why would the down market be the seller's fault? Most of the condos that are closing now have been under construction/in the planning and permitting process for several years. When presales were offered, at the height of the real estate boom, many projects sold out it days or hours. Buyers were all too happy to plunk down their reservation fees, many intending to flip. Most of the flippers couldn't afford to hold on to the property if something went wrong, and most probably never even considered the fact that they may have to hold it. It is the buyers, who bought to flip, who made bad decisions. The fact is that they signed a contract to buy a property. Sellers offered no guarantees that their condos would be worth "X" amount at closing. There is a lot of discussion about buyers walking away. While this may be possible with a RESERVATION, once a hard contract is signed, a seller doesn't necessarily have to let the buyer out.

The "sellers" or developers were providing a product that the market demanded. Nobody (but Shelly) could see this coming four or five years ago when most of these projects began. Real estate is an investment with risks just like any other investment. When the stock market takes a dive and someone loses hundreds of thousands of $$ because their stocks aren't worth what they were when they bought them, there is nobody to sue or blame (assuming there is no Enron-type scandal). Real estate is the same.

Ooops...meant to say "buyers" (preconstruction buyers) CCK ... coffee still hasn't fully kicked in this morning. Sorry for the confusion. And I totally agree 100% of what you are saying.

 

[Camp Creek Kid]

Ooops...meant to say "buyers" (preconstruction buyers) CCK ... coffee still hasn't fully kicked in this morning. Sorry for the confusion. And I totally agree 100% of what you are saying.

Thats A-O.K.

 

[30A Skunkape]

Chickpea and Toots and I will stand in front of you and argue politics and the war with you until you collapse and start screaming it in agony. :funn:

Or until the three of you pitch me over the rail!

 

[30A Skunkape]

Shelly, I didn't realize you dabbled in cartooning

http://www.workingforchange.com/printitem.cfm?itemid=22163

 

[Rita]

Why would the down market be the seller's fault? Most of the condos that are closing now have been under construction/in the planning and permitting process for several years. When presales were offered, at the height of the real estate boom, many projects sold out it days or hours. Buyers were all too happy to plunk down their reservation fees, many intending to flip. Most of the flippers couldn't afford to hold on to the property if something went wrong, and most probably never even considered the fact that they may have to hold it. It is the buyers, who bought to flip, who made bad decisions. The fact is that they signed a contract to buy a property. Sellers offered no guarantees that their condos would be worth "X" amount at closing. There is a lot of discussion about buyers walking away. While this may be possible with a RESERVATION, once a hard contract is signed, a seller doesn't necessarily have to let the buyer out.

The "sellers" or developers were providing a product that the market demanded. Nobody (but Shelly) could see this coming four or five years ago when most of these projects began. Real estate is an investment with risks just like any other investment. When the stock market takes a dive and someone loses hundreds of thousands of $$ because their stocks aren't worth what they were when they bought them, there is nobody to sue or blame (assuming there is no Enron-type scandal). Real estate is the same.

Right on CCK! When you play the game, you enjoy your wins or accept your losses and move on! Kick yourself if needed, but don't blame others.