A very real consideration you must be aware of in a market where values are declining is the value of the new home when completed. We are finding that in many cases buyers are finding out that their new home will no appraise for the value they went to contract on.
With this said, to further complicate the matter, banks will not finance a home for more than the appraised value. So if you contract to purchase was $340,000 and the property will now only appraise for $300,000, the bank will not finance the home for anything more than tha appraisal value of $300,000.
This sinerio will present a new set of problems for buyers to confront. How to come up with the difference, get the builder to adjust their price, or get out of the deal.
The Eckler team
You can try to negotiate it down to what the townhome would be worth if you bought it today. If you think that the market in your area has only dropped 5% to 10% then that is what you ask for.
You can also try to get improvements such as better appliances, upgraded cabinetry, flooring etc...
If all the townhomes in the development are not yet sold, I would find out what the builder is selling your model for and if they are offering any incentives and I would ask for the same.
Help lots of people and have a great day!!!
Patty Da Silva,CDPEÂ©, RESSÂ®, AHWDÂ®
CERTIFIED DISTRESSED PROPERTY EXPERTÂ©
Real Estate Short Sale SpecialistÂ®
At Home with DiversityÂ®
Licensed REALTORÂ® & Mortgage Broker - Senior Financial Advisor