With the recent economic downturn that many attribute to the credit and housing crisis, many successful real estate professionals, builders, and developers are beginning to explore other ways to generate sales and move their stagnant inventory.
One of the more innovative ways to move property, especially for developers with a multitude of houses that they are paying interest on, is trading property. Say for instance a residential developer has 25 vacant homes that he owes $275,000 per house on. In order to pay closing costs, including taxes, and still turn a small profit, he has to sell each home for $300,000. What this developer could do is advertise the trading of his homes for starter homes setting a cap of value of $125,000. The only stipulation being that both parties agree to trade the homes at a value that would make sense for all involved.
1. It benefits the buyer of the more expensive home by being able to purchase the more expensive home without having to sell his smaller home first, because lets face, homes of all price ranges aren't moving like they were. They are able to kill two birds with one stone so to speak
2. It benefits the builder of the more expensive home by reducing his debt with the bank by $150,000. He then can turn around and rent the cheaper home much more easily than he could a $300,000 home and be able to make the payment each month without dipping into his own pocket. In addition to the aforementioned benefits, the reduced debt load of the developer always him to free up borrowing power in order to begin new projects. They are also able to show activity in their neighborhood, which goes a long way in establishing the project.
Another way of generating sales is by offering a discount on the first few houses sold. As previously mentioned, nobody wants to be the first person to buy a house in a new neighborhood. With the way the economy is, a plethora of circumstances could arise บ้านมือสอง that could halt construction and the first homebuyer could be stuck with a lone house overgrown by vacant lots because the developer went bankrupt. Not only will they not get the amenities that are afforded when purchasing a home in a nice subdivision such as a community walking trail or swimming pool for instance, but their home will depreciate rather than appreciate when the subdivision is built out into a well respected established neighborhood. It is important to show activity with the ultimate goal being establishment. You may very well lose money of the first few houses, but if you can become creative, you can easily make that money back on the back end.
An additional promotion that one could employ is partnering with a bank or mortgage broker. Banks make money by lending money, and while the requirements have certainly increased, they still need to lend it to survive. This partnership could include such things as interest rate buy-downs where the builder will buy down the interest rate for the first year, or splitting the cost of a new LCD TV or washer and dryer. This may seem counter-intuitive, but spending a couple thousand dollars now is a lot cheaper in the long run when you are shelling out ten times that amount on interest payments.
Many of these suggestions may not be practical for your specific situation, however, hopefully the dialogue will enable more creative implementations to help move residential real estate in this down market.
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