The old adage, "Pricing it right, sells" is still a favorite in my book. This past year has seen slow condominium sales in the Columbia, SC market. I am sure I am not alone in this.
One of my clients, The Gates at Williams Brice (www.thegatesatwb.com) understood this concept. The Gates is a luxury condominium project that completed construction in July 2007 with a total of 158 units. Within the first year, the developer was able to successfully pay off the mortgage debt. The initial price point was $220K-$260K.
By January of this year, we had 42 remaining units. In order to stimulate sales and closeout the project, we held a highly publicized builder closeout event. The new average pricing for the remaining units came in at $158K. This pricing is very competitive compared to what average pricing runs for a regular DOWTOWN residence in this market. We then offered additional incentives just for the Closeout Event. The result? 20 units contracted!
With 22* remaining units, the same pricing is being offered, and the developer is giving up to 6% in additional incentives* to the buyer on top of the reduced pricing. Incentives are per lender approval. Limited number of incoming producing units also available.
As a result of our success, competing projects surrounding The Gates are now following suit with reduced pricing as well. Current owners of The Gates are happy to know that they will not have to worry about residing in a project with developer owned units for another couple of years. The developer is happy to be able to move on to another project. My sales team and I are happy to be on our way to closing out the units!
This is just another example of how effective pricing can spur sales---even in a slower market.
If you have an investor looking for a turnkey investment, or if you know of someone looking to purchase in downtown Columbia, SC be sure to check out The Gates at Williams Brice first. By the way, we are also offering a 4% co-broke!
For the past few weeks, I've been blogging about a promotion currently being offered by one of my clients, The Gates at Williams Brice. www.thegatesatwb.com The initial average pricing on this project was about $230K per condominium. Since we are nearly sold out, the developer decided to reduce average pricing to $158K--plus offer UNBELIEVABLE incentives in an effort to close out the project quickly. The incentives include up to $10K off the reduced price AND up to 6% in additional incentives for the buyer per lender approval. By the time you consider all of the incentives and reductions, it's nearly over $85,000!
The traffic to the site as well as contracts have been swift, with nearly 10 contracts in just a few days time. Throughout this promotion, I was sure to point out that units were to be sold on a first come, first CONTRACT basis further understating that "time is of the essence."
In the current slow market, it is easy to lose track of this old adage often quoted in real estate. Just recently, this occurred with units at The Gates at Williams Brice. Agent 1 pledged to bring offer back the following morning, and it was to be a cash close. The following day, it was nearing lunchtime, and she had not yet returned. I called Agent 1 to followup and advise her that another agent was bringing clients to look at the same unit. By lunchtime, Agent 2 had brought clients.....you guessed it....Agent 2 ended up contracting the unit. Agent 1 was dissappointed and upset at losing the deal by just 20 minutes time!
There was little I could do. I apologized that she missed out on this, but reminded her I did my due diligence in calling her. I encouraged her to consider another one of our remaining units.
This was a refresher for me in that "time is of the essence." When the market heats up again, and it will---it will be even more important to keep this often repeated adage in mind.
There's still time..........
The Gates still has 18 units* remaining at the time of posting. *Limited number of incoming producing units available. The official closeout event is scheduled for tomorrow---
The title of this post plays on the popular book by Spencer Johnson, named "Who Moved My Cheese." It is essentially about 2 mice and two miniature humans who everyday go to the same spot for cheese. Eventually the cheese dwindles, and it is the mice who have planned ahead by searching for a new source of cheese. The term "IF YOU DO NOT CHANGE, YOU BECOME EXTINCT" comes from the book, and can easily be applied towards our current and recent real estate market. In my local market of Columbia, SC the number of licensed active real estate practitioners have been reduced by nearly 40% within the past year.
One can view this as a positive change, in that there is less competition. On the other hand, it is sad to see so many become "extinct." So what is the secret to survival? Change with the market, and do not be afraid to advise your clients honestly about what they need to do to change with the ebb and flow of the market as well.
Case in point--one of my clients, the The Gates at Williams Brice (www.thegatesatwb.com) has been in development of multi-family dwellings such as condominiums for over 50 years throughout the United States. Like much of the rest of the country, the slowdown stagnated sales. We needed a plan that would closeout the project and sell the remaining final 27 units* of the original 158. The developer and I worked together in developing a price point that was "SELLABLE."
*Limited number of incoming producing units available.
The much publicized $8000 first time home buyer tax credit has substantially increased home sales for properties priced under $180K in the Columbia, SC market. Fortunately the developer was not only able to meet and BEAT this price point, but unveiled a incentive package in addition to the drastic reduction that really 'wowed.' Along with a local advertising firm, we then crafted a marketing plan to effectively implement and promote the new pricing.
The initial average pricing for these units were about $230K. The new price point averages $158K, over $70,000 in average reductions. In addition to this, up to 6% in buyer incentives is also offer per lender approval. Based on a price of $158,000, this equates to nearly another $10K. But wait! There's more.....another $5000* off the reduced pricing. By the time you consider the $8000 tax credit, that's nearly $88,000 in savings/rebates/incentives! *Specials subject to change at anytime at seller's sole discretion.
This program culminates in the BUILDER CLOSEOUT EVENT scheduled for 6/13/09 at
1085 Shop Road, Columbia, SC 29201, noon-5pm.
The result so far? 5 contracts pending and we have yet to find out how many will contract on the big event. The point is that one cannot be afraid to be flexible and change with the market. Then exceed expectations and you will have a formula for success.
A vast majority of agents can appreciate the virtue and benefits of the $8000 tax credit. In fact, my team's business has increased substantially as a result of this government program. I've recently discovered that it can be even more powerful to the eyes of the buyer if a GREAT deal is found and then applied in conjunction with the tax credit. It is a matter of how it is presented to the buyer in order to close the deal.
Case in point--One of my clients is The Gates at Williams Brice in Columbia, SC (www.thegatesatwb.com). It is a new luxury condominium development that is nearly sold out. With 27* remaining units, the project is hosting a Builder Closeout Event on 6/13/09, noon-5pm. The initial list price of each unit averaged around the $230K range for 2 bed/2 bath unit. The new closeout pricing averages about $158,000.
In addition, the developer is also offering $5000 off of the drastically reduced price if your client is pre-approved and attends the 6/13 event. If this is not enough to get the buyer excited, the seller is also offering an additional dealmaker by giving up to 6% in buyer incentives (per lender approval) to be reflected on the closing statement. This can be applied to rate buydown, closing costs, HOA fees, ect.
By the time you work out the figures based on the average sales price of $158,000, you have nearly $15,000 in buyer incentives, not to mention the $70,000 price reduction!
Here's where the first time buyer tax credit comes in: Uncle Sam is then sweetening the deal further by giving the buyer up to $8000! Incentives/savings/tax benefits total nearly $93,000.
This GREAT deal has suddenly become a FANTASTIC DEAL.
The best part? The developer is paying 5% co-broke. You must be present on 6/13/09 to be eligible. All other sales to be paid at 4% co-broke.
* A limited number of income producing units are available. All units sold on a first come, first contract basis.
If you are interested in seeing this project, please join us for our AGENT ONLY PREVIEW LUNCHEON. 6/10/2009, 11:30-2pm---1085 Shop Road, Columbia, SC 29201. Official pricing to be released at this time.
I got a call from an appraiser this past weekend asking me this very question, as she was working on appraising a condo in downtown Columbia. More specifically, the question was "Why are the values going down?" My answer was simple: Supply and Demand. In the last several years, the downtown Columbia area has seen an explosion of new construction and renovation condo projects. Initially, sales were good, despite some prices exceeding $250/sqft. A popular target market was game day fans---seasonal visitors for a handful of football games a year. Then, the market began to fall, auctions were held, and sales seemed to have dried up. Here we are in the 2nd quarter of 2009, and new construction sales of condos are still struggling. So what is one to do? It is said that "only the strong survive." This holds true in the real estate industry as well. So this is what I'm doing to survive....
1) Align yourself with a strong product. Then sell it.
My client is The Gates at Williams Brice. www.thegatesatwb.com We are nearly 80% sold out. Why is this? Better price point. Full appointments such as granite, tile, trim, appliances, ect. More amenities. Basically, you're offering more for your buyer's $$. Did I mention The Gates is paying a 5% Co-Broke? Must be present on 6/13/09. All other sales paid at 4% co-broke.
2) Know the market. Then exceed the market's expectations.
"Affordable Housing" in downtown Columbia typically begins in the $170K and up range for single family homes. For condos, this price goes up to about the $200K range and up. This price point can increase even more if you're speaking of a NEW condo. The Gates at Williams Brice is now exceeding these expectations.
June 13, 2009 Noon-5pm @ 1085 Shop Road, Columbia, SC 29201. The developer is hosting its FINAL CLOSEOUT EVENT. All remaining 27 condos will be sold at INVESTOR prices. No, really. The new pricing will be quite surprising and will "wow" your buyer if they know what typical prices should be in downtown. The new pricing exceeds any pricing previously offered by a developer for new, luxury condominium units in the Columbia market.
If they are not sufficiently "wowed" they will be once they find out that they can receive up to additional 6% in buyer incentives.* Per lender approval. But wait.....there's more to come later.
3) Let everyone know. And I mean EVERYONE.
Eblast it. Blog it. Post it. You never know where the next deal may come from. It's easier to sell a GREAT DEAL even in this market.
Where: Downtown Columbia, SC, near University of South Carolina and Fort Jackson. Gated. Pool. 24 Hour Gym. TV LOUNGE. Granite. Tile. More, much more.
What:Final units offered at INVESTOR prices. Major Closeout event by national developer. Great for first time buyers, parents of university students, and anyone looking to invest in a growing real estate market.
Why Columbia?
Columbia was named #7 in the November 2008 issue SMARTMONEY magazine as one of its top 25 U.S. cities ready to rebound. The University of South Carolina has a nationally acclaimed program for it's school for International Business. We are accessible, with 3 interstate systems in our city.
When:New pricing to be released soon. Date of Closeout Event: June 13 ----noon to 5pm. 1085 Shop Road, Columbia, SC 29201.
Look here before you buy! No contracts will be accepted until 6/13. Visit our office onsite M-F 10-5 and by appointment to preview units, as units will be sold on FIRST COME FIRST CONTRACT BASIS on JUNE 13, 2009.
*Buyers may receive up to 6% in incentives in addition to the reduced pricing. Per lender approval, these incentives may be used towards:
Closing costs
HOA fees
Buy down of interest rate
Taxes
Visit our website www.thegatesatwb.com or call agent Karen 803.546.2112 for details.5% Co-Broke to agents---must be present on 6/13. Stay tuned for more details to follow.....
Originally 158 units. 27 units left for this event. Downtown Columbia, SC, near University of South Carolina and Fort Jackson. Gated. Pool. 24 Hour Gym. TV LOUNGE. Granite. Tile. More, much more.
Final units to be sold at DRASTICALLY REDUCED, INVESTOR prices. UNMATCHED PRICING FOR NEW LUXURY CONDOS IN THE COLUMBIA MARKET! Great for first time buyers, gameday fans, and anyone looking to buy in-town and close to USC. New pricing to be released prior to June 13th. Join us onsite from noon to 5pm on this day to contract your unit.
Look here before you buy! No contracts will be accepted until 6/13. Visit our office onsite M-F 10-5 and by appointment to preview units, as units will be sold on FIRST COME FIRST CONTRACT BASIS on JUNE 13, 2009.
Additional UNBELIEVEABLE incentives to be revealed soon.
Visit our website www.thegatesatwb.com or call agent Karen 803.546.2112 for details. 5% Co-Broke to agents---must be present on 6/13. Stay tuned for more details to follow.....
Below is an email I sent out to my local county council and to agents in the Columbia, SC area. It addresses a sign ordinance that materially affects our ability to do business effectively. Thanks in advance for reading! The county is Richland County in South Carolina.
Dear Council Members, This email is regarding the recent article in The State newspaper published in the Metro section on March 25, 2009. The article was titled "Council: Small for-sale signs are 'blights.' "Richland County Council dumped home builders' efforts to legalize small, temporary roadside signs Tuesday." "The vote to deny was 6-4..."
My name is Karen Yip, and I am a real estate broker in the Columbia area. I am also a constituent, taxpayer, and business woman. This issue regarding the signs not only affects my livelihood, but it will also affect how I vote in the near future.
As you know, the economy as a whole is already in a recession. Although we are in one of the stronger real estate markets in the country, real estate sales are down 30% YTD locally. My fellow Realtors and I work in a strictly commission based industry---our sales dictate our ability to make a living. Signage allows and encourages prospective buyers (especially those from OUT OF TOWN) to find our open houses and find the homes we are trying to sell for OTHER taxpayers.
To the angry homeowners who see the signs as 'street spam'--- you may have to deal with the "eyesore" temporarily, but too many homes for sale in your area or worse, foreclosures of homes that didn't sell will be even bigger "eyesores." It will affect your home values overall.
Another thing to consider--historically residential real estate sales coincide with the ebb and flow of economic numbers. Increase in real estate sales numbers reflect consumer confidence and in turn will affect the economy as a whole.
Penalizing those in the real estate industry who are trying to make a living and secondly improve local economic conditions by selling property is a huge mistake. A $500 fine for attempting to promote our business? How about the politician signs that litter the city and major roads? Who fines these politicians for this? At least our signs promote business and support the local economy through jobs for inspectors, appraisers, loan officers, attorneys, construction workers, and a litany of services that new homeowners seek--such as telephone and cable service.
All of this AFFECTS the very homeowners who are complaining of these 'blights.' Our job is challenging enough in this current economic downturn. It will be even tougher when one has to hope that a prospective buyer can find their way to a house without the assistance of signage. These signs are typically temporary, and removed by agents afterwards.
Tolerance by "angry homeowners' in my opinion is necessary. The bigger picture here is how it will affect Columbia's real estate market as a whole---rather than an adverserial approach, how about we work together for the common goal of increasing and maintaining property values while stimulating the local economy with sales?
Thank you to Norman Jackson, Damon Jeter, Paul Livingston, and Kelvin Washington for voting in the minority---in support of allowing signage.
To Joyce Dickerson, Val Hutchinson, Gwendolyn Davis Kennedy, Bill Malinowski, Greg Pearce, and Kit Smith: I ask that you reconsider on the next hearing regarding this issue.
The issue is not simply about appeasing the beautification advocates. It won't matter how beatiful the streets are if there continues to be a saturation of homes for sale, as the values will be ugly. This email is also being sent out to the entire real estate community. I implore all of you to contact your representative, and to attend the next hearing on this issue on April 7, 2009.
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This is a quality built home by Palmetto Custom Construction. 5 bedrooms 5.5 baths. 4200 sqare feet. Located in Lake Carolina's only Gated Community. There's a gated community pool and dock access. The home features 5 true bedrooms, with the master and guest bedrooms on the main floor. This custom executive home features formals, 2 story foyer, mud room and a bonus room large enough to entertain. Built- ins throughout, tile, hardwoods, granite and more. $10,000 in Buyer incentives. Priced at $549,500. Visit http://yip4homes.com
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