Around 1969 Mick Jagger, of the Rolling Stones, was about to begin a concert with these famous lyrics –

Facing the crushing worship of fans seeking to bask in the glow of their idol, Jagger uttered these words of warning -

“Ooooohh Babies, there are so many of you, just be cool down in front there – don’t push around, keep still – keep together!”

Vancouver’s Condo Concerts

It was not uncommon in the years leading up to the spring of 2008, to witness a similar spectacle. It was hard to miss the day long line ups of pre-sale condo buyers camping on the street. Like the Stones crowd, they were anxious to plunk down their deposit for the chance to buy into projects like the H & H in their hope of getting closer to their golden idol. Front row seats it was said, would provide the best vantage point from which to experience the glow.

Today, the glow has vanished. Yet, the lyrics ring true for those buyer’s whose dilemma is to off-load front row seats in the downward spiral of the Vancouver condo market.

No Sympathy For The Flippers

Pre-Sale Condo Concerts are strange events. They are risky! There are no refunds if it rains. As a ticket scalper, it’s not that you didn’t understand and it’s not that you were not warned. The CBC gave you a heads up that trouble was on the horizon.

“But what’s puzzling you?”

Knowing this, can you really expect sympathy?

The Glow “Stole Many a Mans Soul…”

Some condo buyers ignored the warnings. Now they hear loud thumping in their ears and have pockets rattling in steady rhythm with Vancouver real estate’s down beat as they come to understand that the glow has “stolen many a man’s soul.”

In particular, speculative buyers of the H & H project, particularly dislike the throbbing condo drum. Global Television reports that, many are walking away from their deposits.

Timing – “Tis the nature of the game”

Holding your ticket you’ll notice that the only words on it are the price and the stipulation that the band will turn up and play! It doesn’t guarantee the music will be a crowd pleaser or that you will make a profit. It doesn’t say things won’t change. It doesn’t say global economics will have a melt down and it doesn’t say that the outcome of your decision to buy the ticket will be good or bad. It says nothing, that “is the nature of the game!”

“Moment of Doubt and Pain”

Like the Hell’s Angels who brought a chaotic close to the Stones concert, the Bowra Group, H & H’s court appointed receiver, made it clear in this Global TV report, that they are about to “introduce themselves” to those buyers who chose to walk away. Whether it be in or out of court, they can expect Bowra to say these devilish words;

“Pleased to meet you.”

“Hope you guessed my name.”

Related Posts

Screwed

Pre-Sales and Receivership

Pre-Sale Risk

_____________________________________________________________________________________________

I’m always happy to answer your Vancouver Real Estate question? Call or send me an email Twitter or Skype me at YatterMatters.

Larry

**Quotes from “Sympathy for the Devil” – Rolling Stones with appreciation.

Didn’t Get Enough?

Here is the full tune from The Bridges to Babylon Tour

If you missed it this morning’s (03/13) City TV’s ticker tape claims Sophia buyers must pay $85,000 to keep their condos.

This close to completion $85,000 seems like a lot to finish a unit.

I don’t know which sharp pencil came up with this number. According to the Canada mortgage calculator it will cost an extra $538 per month for a 5 year term and a 25 year amortization. By the way, that’s an extra $23,000 in interest.

Got a Vancouver Real Estate question? I’ll do my best to answer it. Call or send me an email.

Larry

An original purchaser of a Vancouver real estate condo development has asked for help. They seek to make contact with original purchasers of the SOPHIA.

Here is the request:

If you could help get the message out to (buyers only) of the Sophia Development. It will be greatly appreciated.

People can contact savesophia@gmail.com for information and guidance. Buyers will be meeting together soon.

Got a Vancouver Real Estate question? I’ll do my best to answer it. Call or send me an email.

Larry

Courtesy Chandler.com

Another two condo projects hit the Receivership’s books.

Is this the final act?

According to a CBC report – **no longer available** – Chandler Development’s H&H project in Yaletown, and the Garden City project in Richmond is now in receivership.

This “comes on the heels of another developer, the Eden Group of Companies, citing financial difficulties for a decision to halt its third development in Vancouver in less than four months.”

Comparable to Sophia, Riverbend, Bambu, OMA??

Courtesy Chandler.com

The Stink

Bowra the receiver, said they have “discovered that 23 condos in the Chandler Development Group projects were allegedly sold to insiders at prices well below market value”.

Good News – No guarantees

It appears (my emphasis), that the other buyers will get their condos for the price paid as there is enough money available to finish the job.

I strongly recommend

If you purchased a unit in one of these projects you should be speaking with your lawyer.

Other Opinions on This Issue

No doubt current and future buyers will be glad to wait for the following oasis of sanity.

NDP housing critic Diane Thorne said unless our laws change, presales could be the next leaky condo crisis.

“I think it should be a guaranteed price,” she said. “Prices will go up in the beginning, but I think there’s more security for homeowners. They won’t buy something they’ll lose or not be able to afford.”

Bob Rennie, who makes his living marketing presales, says reputable developers welcome new laws.

“Anything the government wants to put in place to protect the consumer doesn’t worry those top 15, 20 developers,” he said. “If you’re getting creative with your financing, or your profit margin is too low, that developer may worry. But then again we’re protecting the consumer so let’s do it.”

Will Wertheim of The Residential Group Realty discusses “Pre-sale Risk” to buyers offering potential solutions for what may be the beginning of a larger issue in the near future.

Matthew Collinge of Royal Lepage fame, offers another perspective into the Chandler issue.

Got a Vancouver Real Estate question? I’ll do my best to answer it. Call or send me an email.

Larry

Flickr.com/photos/ESPNGO

Earlier I posted Wendy Mesley’s Condo Crunch report on the pitfalls of buying a pre-sale residence.

The Financial Institutions Commission of BC published a document in August of 2007 that IMO should be at the front of all agreements involving a residential pre-sale.

The following is a summary of that document. The full text is here.

How Does it Work?

• A residential unit is sold before completion of construction
• Typically the sale occurs two years before completion.
• The unit is sold at a fixed price
• Deposits are taken to be held in trust by a lawyer, a real estate brokerage, or notary. If deposit protection is obtained, the deposits may be released to the developer.
• If the development does not proceed the contract is terminated and deposits returned.
• No interest will be paid if it was not a requirement of the contract.

Get Advice

• have a Realtor® explain the details
• consult with a lawyer about your rights and obligations

Make Certain You Understand the Disclosure Statement

• you should be provided a reasonable time to read it
• under the Real Estate Development Marketing Act you the right to cancel the purchase within seven days

The Risks

Some reasons a development will not proceed to completion:

• inadequate sales
• financing
• permits
• higher than expected cost of construction
• can’t find skilled workers

What it Means to You When

When the Development is Delayed

• contract can be terminated
• contract can be extended
• higher price can be demanded if extended
• agree on a new contract (probably at a much higher price)
• developer may choose to do none of the above and decide to sell the unit to someone else.

Your Options

Rising market:

• seek the extension before the termination date
  be prepared to arrange temporary accommodation
• invest your purchase monies to keep pace with the rising market
• if you are funding your purchase from the sale of your current home don’t sell too soon so that you can keep pace with the rising market

Declining Market

• if the project is completed on time you will be obliged to pay the agreed price

Assignment of a Contract

• they may not be permissible
• there may be a substantial fee involved
• the above risks apply to the Assignment Purchaser
• the new buyer may not be able to recover any monies paid to the original buyer and the developer

What you think you saw may not be what you bought

• most pre-sale contracts allow the developer to make material substitutions
• they can also change the layout of the unit

Got a Vancouver Real Estate question? I’ll do my best to answer it. Call or send me an email.

Larry