Thriving Condo Sales | John Burns Real Estate Consulting

Thriving Condo Sales


It sounds like a home builder’s fantasy, but we found this real-life scenario in Torrance, California: a project that’s been selling an average of 4 homes a week with 40% of its buyers paying in cash and many others coming up with a down payment that far exceeds Fannie and Freddie’s required minimum in today’s environment.

As a condo project, The Foundry by Standard Pacific is facing even more adversity than the broader housing market. But they’ve applied some tactics that turned lemons into lemonade.

Can you make any of these takeaways work for you?

    1. Creative Financing
      Condo mortgages are scarce, due in large part to Fannie and Freddie’s new requirements that went into place on March 1st and July 1st, respectively. Now condo projects must be at least 70% presold before the GSEs will guarantee or buy mortgages. Division management worked closely with Standard Pacific Mortgage (SPM) to develop a dog-and-pony show marketing the project’s benefits to major lenders. By telling their story, SPM found a supportive institutional partner. Today, SPM can offer a mortgage to buyers who put 20-30% down while not yet having met the 70% presale requirement.
    2. Know Your Buyer
      Located just one block from a Korean church, the builder showed respect to the Korean and Korean-American buyer community: they hired a Korean-speaking sales agent and infused Asian influences into the designs. As a result of the effort, Standard Pacific has been able to benefit from the close-knit community’s word-of-mouth advertising.
    3. Keep it Simple
      When it comes to product, many builders equate “simple” with “stripped down.” Here it’s just the opposite: Standard Pacific included many upgrade options, such as kitchen appliances, upgraded flooring and laundry appliances.
    4. Resist the Urge To Open Sales Too Early
      Noticing that sales in previous condo projects lagged until the development was completely finished, Standard Pacific waited this one out. Once the last of the equipment was cleared away, buyers responded because they were able to experience the community feeling of the common areas and could more easily picture themselves living in the environment.

Our team is in hundreds of communities across the country and we’re always looking for examples of “What’s Working.” If you know of a project that’s seeing success, please send us a quick e-mail at contact@realestateconsulting.com with information on the location, builder, and what seems to make it special. We’ll be happy to research it and share great insight in future newsletters.

 


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