Posted by dealmaker on December 07, 2005 at 13:11:45:
Common? Yes
Legal? Probably
Ethical? In business andything that “makes” the sale is ethical.
Thoughts? That’s why we do “due diligence”.
The only thing that matters is: Are you HAPPY and SATISFIED with YOUR deal? It’s like trying to “better deal” your wife or girlfriend.
dealmaker
Laws about RE developer’s marketing tactics - Posted by Eric
Posted by Eric on December 07, 2005 at 11:28:23:
I recently bought a new construction home in Chicago from a small, local developer (through a broker) and I have run into a situation I am not sure if I should be mad about.
Thought maybe some of you experienced developers or lawyers can give me your side of it.
Developer did 3 teardowns and built 3 new SFH’s on the same street. All houses are the same floor plan. I was led to believe I was the second of the 3 to buy. The sales brochure indicated the asking prices for the homes were the same for 2 of them and the 3rd was priced $100,000 higher and was marked SOLD. (it was higher because of extra interior upgrades supposedly)
These houses would be the highest priced homes on the street.
I purchased mine and the 3rd was bought for the same price a few weeks later. Several weeks after that, we learned that the higher priced home was actually going to be the developer’s personal home, which we thought was fine.
However, in the ensuing months, we have realized that the higher “sale price” of that house is not actually being recorded because no “transaction” actually took place at the higher price. Only the developer’s purchase of the teardown house is recorded.
I feel a little misled. In seeing SOLD on the house at the higher price, I assumed that a real transaction would show at that price and that was a partial reason I felt good about buying mine at the price I did. I still feel ok about the price I paid, but I also feel like when someone goes to do comps (or I try to sell) on my house, the value will not be as high as it would be if the higher “transaction” had actually taken place.
Is this a common practice by developers and/or sales agents? Is it legal? Is it ethical? Any thoughts?
Thanks
Eric