Comments on: My $23,750 Mistake at Olive 8 http://www.npost.com/blog/2009/05/05/my-23750-mistake-at-olive-8/ Connecting Startups with Talent Since 1999 Fri, 27 May 2011 04:20:51 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Ian Hu http://www.npost.com/blog/2009/05/05/my-23750-mistake-at-olive-8/#comment-462 Ian Hu Wed, 13 May 2009 12:55:04 +0000 http://www.npost.com/?p=2666#comment-462 Nathan, For your deposit (or so called ernest money), there should be a clause "subject to financing". Since all the banks have now tightened up the credit and request a huge cash down payment (more like 20%+ instead of the teasing zero down back in the pre-meltdown era), you should be able to get your total $23K back from the builder if you can provide document that you are being turned down by your bank. For this amount of dollar in this economy, definitely worth looking into it and maybe call a real estate lawyer (I know Kirk's wife is specialized in this area). My friend Thach who built Moda on Second Ave (which he offered affordable condos in Downtown Seattle instead of raising price like your builder) is now renting their units out. Moda was an instant sold out because working young kids cannot afford housing in Downtown. It turns out that they don't have the extra down payment required by the banks when it comes to closing time so they have to back out from the deal. I doubt that he made a fortune by capturing buyers' down payment... Hope it helps and good luck! Nathan,

For your deposit (or so called ernest money), there should be a clause “subject to financing”. Since all the banks have now tightened up the credit and request a huge cash down payment (more like 20%+ instead of the teasing zero down back in the pre-meltdown era), you should be able to get your total $23K back from the builder if you can provide document that you are being turned down by your bank.

For this amount of dollar in this economy, definitely worth looking into it and maybe call a real estate lawyer (I know Kirk’s wife is specialized in this area).

My friend Thach who built Moda on Second Ave (which he offered affordable condos in Downtown Seattle instead of raising price like your builder) is now renting their units out. Moda was an instant sold out because working young kids cannot afford housing in Downtown. It turns out that they don’t have the extra down payment required by the banks when it comes to closing time so they have to back out from the deal. I doubt that he made a fortune by capturing buyers’ down payment…

Hope it helps and good luck!

]]> By: josh maher http://www.npost.com/blog/2009/05/05/my-23750-mistake-at-olive-8/#comment-461 josh maher Tue, 05 May 2009 20:17:47 +0000 http://www.npost.com/?p=2666#comment-461 What about negotiating the price down, if the builder can't liquidate the units, the carrying costs will add up fast. Covering his costs and time is a fair offer and is certainly more appealing than the $23k. It is also more appealing then additional carrying costs. You should be able to get bring some research into the anticipated carrying costs he will incur if he doesn't sell to you on the agreed date (granted, you don't know how he invested in the property but you can spell out the assumptions you've made). If it's buyers remorse because there are better places on the market now, or you don't want to live in a high rise, well that is another story. Purely from a price point perspective covering both costs (building, carrying, interest, opportunity) and time is appealing. What about negotiating the price down, if the builder can’t liquidate the units, the carrying costs will add up fast. Covering his costs and time is a fair offer and is certainly more appealing than the $23k. It is also more appealing then additional carrying costs. You should be able to get bring some research into the anticipated carrying costs he will incur if he doesn’t sell to you on the agreed date (granted, you don’t know how he invested in the property but you can spell out the assumptions you’ve made).

If it’s buyers remorse because there are better places on the market now, or you don’t want to live in a high rise, well that is another story. Purely from a price point perspective covering both costs (building, carrying, interest, opportunity) and time is appealing.

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