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Nonrefundable Deposits.....The Correct Way To Protect Your Builder!!!

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Services for Real Estate Pros with RE/MAX Executive Realty - Happily Retired 104763

 


Mr. Buyer, don’t you understand that if you want to finish the basement of a new age restricted condo and you decide not to close on that condo; the builder is left holding the bag.  The builder will now be marketing a new condo for older buyers and the condo has a finished basement that no one wants to pay for. 

Most 55+ buyers are not interested in climbing stairs and certainly not two flights of stairs.  The nonrefundable deposit will pay for that basement, if the builder cannot find a buyer to pay for the upgrade.  It’s a common occurrence with new construction.  Expect to pay upfront for an extra that is not in popular demand, or finish the basement after you own it, Mr. Buyer!!!

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Barbara Todaro, Great Grandmother to Caleb, Santino, Aiden and Gianni       

Todaro Team - Retired

508-918-9148

               

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Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales

You said it correctly Barbara.  If the buyer intends to close on the property there should be no problem with a non refundable deposit for extras.

Sep 02, 2011 12:27 PM
Susan Morrison
RE/MAX Executive Realty - Franklin, MA

The builder needs to cover his costs so he does not take a loss.

Sep 02, 2011 12:30 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Al.....we always have to think about that happening....I've seen loving couples in divorce court one week before closing and defaulting on their deposit....

susan....yes, he does....

Sep 02, 2011 12:33 PM
Judy Klem
Transition Stage LLC - Shelton, CT
Home Staging, Senior Move Management, Fairfield/New Haven counties

Hi Barbara - More and more, I see situations where taking the time to provide some context to all involved can go a long way toward having everyone understand the likely outcome of their decisions. This is a prine example, and well presented.

Sep 02, 2011 12:43 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

thanks, judy........there's a reason for everything....I've seen many builders get hurt because no one was really protecting their interests.....they take the chance and don't cover themselves because they want the deal.....

Sep 02, 2011 12:57 PM
Michael Thornton
RadnorLake Video - Nashville, TN
Nashville Area - Photography & Videography

Good evening, Barbara. Wouldn't the finished basement add to the value of the dwelling?

Sep 02, 2011 01:19 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Michael....it would, but not in an adult community.....seniors don't want stairs.....they won't pay for a finished basement....we have three subdivisions with this concept, and no one has even had discussion about the basement.....

Sep 02, 2011 01:29 PM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Barbara, it's amazing that buyers of new construction don't understand this. I mean, if they tell the builder that they want a 3 story waterfall in the middle of the house, then back out, who's gonna want to buy that house (besides me)?

Sep 02, 2011 01:49 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Eric....no one other than you, my friend.....

Sep 02, 2011 02:01 PM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,AZ,CA,CO,FL,GA,IN,MI,MS,NC,NV,SC,TN,TX,VA,WA

Builders do have to be very careful with large upgrades like finishing a basement.  You can customize a home too much that it restricts its appeal to other buyers.

Sep 02, 2011 02:13 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Rodney.....that's very true.....and then they end up taking a loss on the total upgrade.

Sep 02, 2011 02:19 PM
Christine Smith
Buyers Brokers Only LLC - www.BuyersBrokersOnly.com - Canton, MA
Exclusive Buyer Agent & Attorney, Canton, MA
That is what the deposit is for!
Sep 02, 2011 02:24 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

christine....yes, it is.....but I've seen deposits negotiated and the builder is not reimbursed for the cost of the upgrades.....if the deposit is nonrefundable, his costs are covered.....

Sep 02, 2011 02:31 PM
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Barbara - The cost of finishing the basement will not add that amount to the value of this property.  Classic case of cost not equaling value.

Sep 02, 2011 11:42 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Conrad....on the low end of the range for finished basements, the cost might be around $35/s.f. and I've seen it as high as $65/s.f......the problem is that no one buying an adult community wants another flight of stairs to use....

Sep 02, 2011 11:53 PM
Joshua Zargari
MJ Decorators Workshop LI staging and home decorating - Lynbrook, NY
MJ Decorators Workshop

Good morning Barbara.

You are so right about the stairs...

Many 55+ people are worried about climbing stairs.

Sep 03, 2011 01:17 AM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Hi Joshua....finished basements are not a popular item for an adult community.

Sep 03, 2011 01:42 AM
Gary Berset
RE/MAX Executive Realty, Medway, MA 02053 - Medway, MA

That's a typical move for a builder to make today.  There are too many people defaulting and then the legal fees to get the deposit.

Sep 03, 2011 10:01 AM
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

Barbara, well said and so true. In the Mack Truck sales business I would order almost anything with no deposit if it was main stream stuff. If a customer wanted something out of the ordinary I insisted on a nonrefundable deposit or I would not order it.

Sep 03, 2011 04:57 PM
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Gary....right...

Tom.....yes, it makes sense.....why pay an attorney to fight over money that you should not have been stuck with in the real estate business....

Sep 03, 2011 11:48 PM
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