Condo Sales Mishap -- HELP PLEASE!!!

[spanky]

New to the forum! Thanks!

Here's the short version: My wife and I shook hands on a deal on a unit at a new condo development today, and were quite pleased with the deal.

HOWEVER, two hours later, the sales agent calls to tell us that the price schedule was in fact changed last week, and that the sales staff was not properly informed. Our deal is now null-and-void, and the "new" price is now $100K higher than what we agreed upon! They're holding the unit for us for 1 day to decide if we're amenable to the new price. Otherwise, tough luck.

This is coming from a very large and reputable developer. We were shocked and surprised to say the least.

Has anyone heard of something similar happening? Are we being abused? What recourse do we have? Unfortunately, this is the last unit that we would like in this building.

Thanks!!!
Won.

[Drexel]

this happened with me at the Orion....when I was told a price over the phone and fax, when the paperwork came over , it was about $ 25,000.00 more,,,this was during the time that condo sales were strong and one didnt argue..........i was told too that I was quoted the wrong price initially too....

[lofter1]

Isn't that akin to a "Bait & Switch (http://www.ftc.gov/bcp/guides/baitads-gd.htm)" scheme :confused:

Especially if an offer / price is in writing :confused: :confused:

Legal eagles and brokers please toss in your two cents ...

[Peteynyc1]

I had something similar happen to me at 325 Fifth. They had offered me a price at first offering and I signed a letter of intent to take that unit before the sales office opened. I liked the ammenities but wasnt too crazy about the location or even the original first offering price ($1200/sq ft) I was trying to get into the sales office on the opening days but they were totally booked. When I finally got in there a few days later to complete my initial letter of intent offering, the price had gone up 35,000. I was so pissed off, particularly the arrogance and attitude in which they conveyed this information. I told my broker I no longer wanted the unit and he went into damage control mode. He actually got them to bring the price back down to what was originally offered to me but I had already started looking elsewhere. I ended up getting something I like better and at a better price ($1050/sq ft). Remember this is a buyers market now. There are so many choices out there, so many great buildings. Unless you absolutely must have this apartment, I would consider playing hardball in this situation and see what happens. I personally wouldnt be able to stomach living there after being shafted for 100K.

[spanky]

Thanks for the input so far.

Is there any recourse through the Better Business Bureau or the Real Estate Commissioner? I'm sure the company would not like the negative attention of either entity.

[Front_Porch]

That sucks.

As your realtor should have advised you, an oral contract is worth the paper it's written on. You could complain to the Real Estate Board of New York (search Google for REBNY) but it probably won't change your pricing.

However, I'm sure the Post or the Times or would be interested in your story, though they might want you to allow them to publish your name and/or your photo. The Real Deal, an industry trade, would probably also love to hear about it.

I have ties to all three so PM me if you want a contact.

ali r.
{downtown broker}

[lofter1]

spanky (and others who have suffered such fates): I urge you to pursue this in a way that will expose those buildings / persons involved, as it seems it is a somewhat widespread practice where the buyers are the ones who suffer.

ali: If a price were put on paper (drexel states that the price for his unit was faxed) would that change your position?

[Front_Porch]

ali: If a price were put on paper (drexel states that the price for his unit was faxed) would that change your position?


Nope. I'm no lawyer, so attorneys should feel free to jump in here and help me, but I believe a contract is three things: offer, acceptance, consideration.

The consideration is the exchange of something valuable -- with real estate contracts, usually a 5% or 10% down payment.

I know that I lost a $5 MM deal (sob!) where we had signed contracts but the down payment was never made . . . I would guess a signed letter-of-intent would be roughly the same thing . . . an offer and an acceptance without the consideration that makes for a complete contract.

The sellers are certainly being tres uncool here, it's just that in the real world buyer enforcement is limited.

ali r.
{downtown broker}

[lofter1]

OK ^^^ Since we now seem to be in a buyer's market it would appear that all buyers should consider the initial offered price and then drop it 20% or more (with the knowledge that the offerer is likely to raise the price 10% after the initial discussion) --

If the sellers can try hardball then buyers should do the same ...

With the number of nearly identical condo buildings going up (all seem to have the same interior fixtures) -- and with so many in proximity to each other -- a savvy buyer should be able to play a few buildings off each other and end up with a much better deal for what they want than what the developers initially offer.

[Front_Porch]

Lofter, I see what you're thinking, but 20% below initial offered price ain't likely to fly.

The hardball tactic that works is actually to put in multiple offers -- and then walk away from the units that try to screw you.

After all, "it's not yet a valid contract" works both ways.

Also, I'm not going to do a huge commercial for me as an agent here, because everyone who reads my posts knows new developments aren't my favorite thing, but it shows why it helps buyers to have an agent in general -- its easier to have someone else do this kind of street fighting for you.

Petenyc1's story illustrates both my points perfectly -- he got a level of protection from his agent, and a great level of protection by walking and finding another apartment.

ali r.
{downtown broker}