To A Large Degree, The Problem Was The Boom Itself
The Sun Sentinel reports from Florida. “When Jennifer Wigand put down a deposit in 2005 for a condominium, she hoped to quickly sell it and use the profits to help pay her law school loans. Then the housing market plunged. Wigand said she wasn’t worried because the developer had promised she could back out any time and her money would be returned. But in July, when she asked to take part in that program, Wigand said she was told it had been canceled.”
“‘I was disappointed that the developers and their agents went back on their word,’ said the 24-year-old Fort Lauderdale resident. ‘I just want my [$39,200] deposit back.’”
“Wigand last month filed a lawsuit to get out of the deal. Last week, 20 other buyers in Veranda joined her suit.”
“Brad Hunter, director of the South Florida region for Metrostudy, said more lawsuits are being filed because ‘there is a lot of buyer’s remorse out there.’”
“About 40 percent to 60 percent of buyers are trying to wiggle out of their contracts, said Gary Poliakoff, a Fort Lauderdale attorney, referring to a dozen projects in South Florida that his firm represents, including Veranda.”
“‘The claims and the suits are namely a means for an end for investor-buyers to get out of deals where they weren’t able to realize the profits they expected, but it doesn’t mean the reasons are legitimate,’ Poliakoff said.”
“Developers are not budging, Poliakoff said, because they ‘built the buildings on the reliance that the buyers are ready, willing and able to close.’”
“John Mike, chairman of the Realtors Association of the Palm Beaches, said those most upset are buyers who had no intention of living in their properties.”
“‘A lot of those condos, unfortunately, were bought by speculators with the same business plans — to flip their properties, and unfortunately that has created a glut of units. Now were are seeing a large number or people trying to get their money back by hiring lawyers,’ he said.”
“Ori Onn, a real estate agent, signed a contract in 2005 to buy a one-bedroom Phase One condo for $295,000. He put down $59,000 and like Wigand, he planned to flip it.”
“‘They told me they would put it on a resale program if I didn’t go through with the deal,’ Onn said. ‘I just want my money back.’”
The Herald Tribune from Florida. “To some degree, the price-cutting seems to be working in Southwest Florida, with the Sarasota-Bradenton area moving more properties in September than either Fort Lauderdale or Miami, where median prices last month remained at close to their pre-boom peaks.”
“The median price for a home in the Sarasota-Bradenton market has dropped $109,200 since the beginning of 2006, based on the September sales report by the Florida Association of Realtors. Back in January 2006, the median was $353,500. Now it is 31 percent less.”
“But sellers and their agents have been rewarded for their price cutting with better sales volume than markets where cuts have not occurred.”
“Starting early this year, Matthew Augustyniak decided that his Horizon Group, a Bradenton real estate firm, needed to adapt to a stagnant market. He began training agents to convince banks to write off portions of their mortgages in order to move property.”
“‘This month alone, I have 150 sales of new homes that aren’t put in the MLS,’ Augustyniak said.”
“He also is getting individual clients into homes. One woman is buying a Palm-Aire home for $270,000 that originally sold for $400,000 and carried a bank mortgage of $360,000. ‘The bank took the hit on $90,000. So I look at that as a positive effect on my buyer,’ he said.”
“In the Sarasota MLS, there are now 7,967 homes for sale, and the current selling rate is 70 homes a week, representing a 114-week supply, according to Team Dutoit. The 4,673 condo units for sale in mid-October represent a 156-week supply given the current sales rate of 30 per week.”
“To a large degree, the problem was the boom itself, which took the market to excesses both in pricing and in mortgage terms.”
“‘The biggest reason is the unwinding of the housing bubble, the hangover effect, if you will,’ said Geberer, the economist with Orlando-based Fishkind & Associates. ‘We had three years of record growth in new home sales and existing home sales, and three years of record prices. Much of that activity was investor-driven and speculative, for which there is no end user and no end demand.’”
The State from South Carolina. “Despite a steep decline in Columbia-area home sales in September, real estate agents remain optimistic because of the area’s traditionally stable market.”
“Sales sank 18 percent in September over the same month last year, according to data from the S.C. Association of Realtors.”
“Mike Taylor, co-owner of Century 21 Bob Capes Realtors, said the numbers show a return to a normal market after a couple of banner years. ‘It’s just not the record-setting market that we’re used to,’ he said.”
“‘If people are waiting for the times when … every month was a record, it will be a long time before we see that again,’ he said.”
“Home sales were bleak statewide, dropping nearly 18 percent. The coast continued to show the steepest declines, with the Charleston area’s sales dipping more than 40 percent.”
“Columbia’s economic diversification helps during housing swoons, said Tommy Carter, broker-in-charge of Russell & Jeffcoat Realtors’ metro office. ‘Even during bad times, it’s not too bad,’ he said.”
The Free Times from South Carolina. “A virtual meltdown in the subprime mortgage market has contributed to a slowdown in homebuilding and a skyrocketing foreclosure rate. That’s the national picture anyway. Local industry observers say the situation is better in Columbia and statewide.”
“New-home sales have fallen in South Carolina, says Mark Nix, director of the Home Builders Association of South Carolina, adding that the median price of a new home in Columbia is about $185,000.”
“Nick Kremydas, CEO of the South Carolina Association of REALTORS, even calls the falling price of new homes a good thing. ‘After a 10-year boom in real estate, a cooling off period is healthy,’ Kremydas says. ‘It’s not a bust by any means, but the market is catching its breath.’”
“‘We expect thousands and thousands of people to move into South Carolina,’ Kremydas says. ‘We don’t have enough houses for them right now.’”
“And while home prices have fallen, Nix says the Home Builders Association of South Carolina has launched a program dubbed ‘Buy Now’ to encourage people to buy new homes and remind them that it is a good time to buy — if they have the money.”
The News & Observer from North Carolina. “Economists looking for the bottom of the housing slump found instead an accelerating chasm in a new report on the Triangle market. Sales of existing homes fell 24 percent in September, the sharpest decline since the market turned down a year ago.”
“‘That’s big,’ said Moody’s Economy.com economist Michael Helmar, who tracks Triangle housing. ‘Your market is on a downward track, and it looks like there may be some more pain to go.’”
“The monthly report from Triangle MLS provided signs that there is indeed more misery ahead for the region’s largest industry and the hundreds of businesses that depend on it. The inventory of unsold homes rose 23.7 percent from September 2006, and pending sales were down 14 percent, falling to their lowest level in four years.”
“Also, the number of homes on the market with reduced prices was 50 percent higher than a year ago, and the number of withdrawn listings was up 19 percent. The ranks of home sellers who had essentially given up and allowed their listings to expire was up 52 percent.”
“More recently, said Eb Moore, CEO of one of the Triangle’s largest residential brokerages, the market for homes costing $1 million or more has been particularly weak. The number of pricey homes on the market has swelled as owners who financed them with adjustable-rate mortgages try to escape rising monthly payments, he said.”
“The glutted inventory of unsold homes includes 405 properties priced at $1 million, compared with 225 in March 2006. Moore said homes costing $1 million or more now take about a year to sell.”
“The report showed September closings at 1,990 for in Wake, Durham, Orange and Johnston counties, down from 2,630 a year earlier. The decline was nearly double the next largest monthly fall in the past year: 13 percent tumbles in December 2006 and July 2007.”
“‘We’re not bulletproof, we’re just bullet resistant, and that means we’re in a downturn,’ said Moore.”
“Much of that activity was investor-driven and speculative, for which there is no end user and no end demand.’”
Kinda like the underlying securities.
Kinda like the underlying securities.
Definitely oil!
Not unlike a bubble…
I wouldn’t call them “underlying” securities, rather “derived” securities. It’s the housing asset that “underlies” the mortgage note. Either way, though, I agree with palmetto that both entities are hot potatoes whose price must decline.
What happened? People don’t believe in escrow accounts any more? If i make a 40k deposit its going to be held in an escrow account-or i am not buying.
I agree. A couple I used to know were very naive about RE and bought a FSBO where they gave the owner a 10% deposit. Sheesh. Fortunately, the owner was one of those types whose handshake you could trust, so no harm done, and the deal went through very nicely. But there was a little confusion at the title company over the situation and that’s how they learned they should have used an escrow account. I’m tellin’ ya, these folks must have been born under a lucky star. They paid about $10,000 too much for the property at the time, but a few years later, made out like bandits when they sold, because of the bubble.
Did you read in the Tribune today about New Port’s developer putting that tract up for sale? Of course, scads of rich people were supposed to descend on Tampa to buy in that development, which was promoted in a south Florida-style launch that featured acrobats and the usual promises of sex, leisure, and exclusive luxury. (The website is still up, by the way. Here’s one snippet: “From within your architecturally distinctive residence or upon its gracious terrace, you feel the caress of a bay breeze as you gaze across the urban landscape and emerald waters. And yet, you remain one cool remove from the sea and city sites at your feet. Privacy and luxury envelop you. Rooftop gardens and terraces create an enchanting oasis in the heart of the city.”) Now the only thing standing, besides a handful of contractors’ trailers, is an absolutely hideous condo tower that will look like public housing once the paint job fades.
The biggest casualty occurred when that area was bulldozed, because my favorite run-down burger joint, Jimmy Mac’s, ceased to exist. I used to think that some of the trophy fish mounted on the walls of that restaurant were older than me.
Compared with an advertisment for Florida from 1925; right before the colossal Florida land bust in 1926 :
History always repeats itself.
http://xroads.virginia.edu/~hyper/Allen/ch11.html
In the context of Ben’s post, I don’t think the presence of an escrow account matters. The significant phrase is “buyers are trying to wriggle out of their contracts”.
Contracts!!
I’m Australian, so I don’t know the legal framework in Florida, but in a similar situation over here a few years back not only did the buyers NOT get their deposit back, but the developer was suing demanding they complete the purchase.
I know developers that are telling me that buyers are trying to back out of contracts in droves. In turn, the developer is suing them in many cases for fraud where these people are saying they no longer have the financial wherewithal to close (and are likely lying). IRS audits coming.
You never know! Gov’ner Jeb Bush (George’s Brother) loves to invalidate contracts. You’d think a “conservative” wouldn’t do that, but you’d be wrong.
Let me give you an example: Folks in Florida willingly and knowingly entered into contracts with their developer regarding certain “CC&R” (covenants, conditions & restrictions). Many of these restricted things like the ability to fly a flag in your front lawn, or to put solar electric panels on your home.
In a move that baffled/infuriated me, the Guv’ner pushed through legislation invalidating these restrictions.
This angered me because *I* was savvy enough not to be restricted by such terms; shouldn’t I be allowed to profit from the distinguishing characteristics of my property, namely the ability to fly the flag and to have solar panels on my roof?
SO if Jeb Bush invalidated legal contracts before, he can do it again. It all depends on what he thinks can get him the most votes.
yeah,but Jeb isn’t the govenor anymore
Doesn’t matter…..he’ll get blamed anyways.
Well, my legal residence is California, so I guess I lost track!
LOL
It was a good rant so I don’t think we should get hung-up on the details!
yep, never let facts get in the way of a nuts’ rants!
Agreed….enjoyed it too.
..
Jeb Bush ain’t the Governor down here anymore. He left for the family retreat in South America.
Scarecrow Crist is now the Governor.
..
Governor Eyebrows.
Actually, the remedies are the same in Florida. At least theoretically, a seller can ask the court for an order requiring the buyer to purchase. Normally not done that way since a buyer may not be able to complete the sale (at least now anyway) and it is usually easier to just fight about the money than force a sale.
I don’t know how it’s done in FL, but in OH no money leaves an escrow account until the closing. Brokerages can lose their license and be prosecuted. I don’t know if the same applies to builders and developers.
ghost
dont you know that Floridians dont ” CARE ” how you did it up north ??
thats been a battle cry for decades
( to be fair it does get on yer nerves hearing all the nasally carpetbaggers going on forever about ” how we did it back in new york/michigan/ wherever ” ).
What I meant was I don’t know the FL laws only the OH laws, so I’m not sure what you do with escrow money. It’s amazing how the laws vary from state to state. That’s why you can’t use your RE, law, or many other licenses outside your own state.
Well, in FL how it works is Mozillo just gives you the money and you don’t ever have to pay it back.
or you get to pay in suntan oil.
I read in a story a few weeks ago that in these new developments, you could have your deposit put in escrow but you then didn’t get the extras the developer was offering. To get the goodies, you had to pay deposit directly and most went for the goodies. Greed is good until it turns on you.
Simon;
That money was probably in escrow. If either party does not follow thru as per the contract terms, the other party is usually due the escrow.
I don’t think most RE contratcs have “I changed my mind, so I want my money back” provisions. Thats why in a lot of these cases they look for issues like “the contratc sadi it was 1230 sq feet and it was only 1227 sq feet. We want our money back.
Also, if the “law student” didn’t get the refund promise in writing, (Law 101) she s SOL.
“Mike Taylor, co-owner of Century 21 Bob Capes Realtors, said the numbers show a return to a normal market after a couple of banner years. ‘It’s just not the record-setting market that we’re used to,’ he said.”
so the Carolina realtors are saying the exact same thing now, that the Florida realtors were saying 6 months ago. Hope it works better for them than it did the Florida realtors.
’so the Carolina realtors are saying the exact same thing now, that the Florida realtors were saying 6 months ago’
- Ditto that for the Washington, Oregon, Utah,Colorado & ….
Wonder what their logo is, presuming their acronym is the obvious “SCAR”.
Well they’ll get a little reprieve until the sales don’t appear in January. In SE Tennessee, the supply jumped from 8 months in August to 12 months in September. The area is just about 6 months to a year behind the super bubble areas. Lots of speculators from the bubble areas thought it would be a good idea to buy from the dumb locals and are starting to lose their shirt.
Here is one a guy from Chicago paid $90k for a not bad house last November and put some remodeling in. Just went on the market for $175k. Not a bad investment, huh? Well, it gets better, you see this house isn’t anywhere near a cable TV line, not well situated for sat TV, no cell service and is on well water the drought has cause sulfur to start degassing off of. Not to mention it is in a hollow with about 6 house all of whom use to be related to each other. So who was dumb in this sale?
Yeah, SC was late to the party, luckily we moved up here from Sarasota, and knew the warning signs. Also if they don’t have enough homes in Columbia, we have way more than we need here in Charleston. The downside is the infrastructure has not kept up with the home building, but that is a minor problem, right?
“To some degree, the price-cutting seems to be working in Southwest Florida, with the Sarasota-Bradenton area moving more properties in September than either Fort Lauderdale or Miami, where median prices last month remained at close to their pre-boom peaks.”
It has been interesting to see how the bubble has affected the various sub-markets within the overall Florida market. I recall, back in 2003-4, being shocked at the prices in Manatee and Sarasota counties, because where I live in Hillsborough, we weren’t seeing it. Then all of a sudden, in our area, it seemed the bubble hit all at once in 2004-5, prices skyrocketed and then everything locked up. Hillsborough County was late to the party, while Southwest FLA, South Florida and the Orlando area were going crazy.
“Hillsborough County was late to the party…”
Yes…and the ironic thing is those areas that were late to the party have been the first to start falling back to normal, not that we’re not seeing HUGE reductions in Palm Beach County.
The wife and I went to look at a nice little house in Palm Beach gardens on a 1/4 acre lot for $145K…bank owned. 2/2/1.5 car garage with a den.
Kind of like being late to a party where there was a shooting in the parking lot 10 minutes before you pulled in.
Yeah, I don’t get to drink as much kool aide tonight because I got here later. However, at least I’m not as bad off as that guy going out on the stretcher.
:0
How do you think up these bits of wisdom?
Have you ever thought about being a regular on SNL.
This is really humorous!
I’m not sure how much law school costs, but wouldn’t it have made more sense to just put the 40k towards the loans? I would think that would at least have made a dent. I can’t believe these people just thought that they could back out whenever and get all their money back. You’d think that they would have gotten a clause like that put into writing. If it sounds too good to be true …
Most likely the 40K are borrowed as well.
Yup, my guess is she took out additional student loans to cover the $40k deposit. What an idiot…..
The Sun Sentinel article generated a lot of reader comments. Just two samples:
ol’ crack head dummy
Whining” I want my money back.”
I guess in law school they never mentioned the word “risk.”
Please do us all a favor don’t become a lawyer, you will do your clients more harm than good…
With brains like these, she might find herself having to take a few whacks at the bar exam in another year or two.
Half the people that took the Florida bar flunked part of it. Of course, that includes the out of staters. If she passed, there should be a disclaimer on her law license.
During the height of the boom, any developer would be happy to give you your money back if you decided against it. They would make more money on the next schmuck to walk in the door 20 minutes later.
I can remember hearing the “you can always back out” line from a lot of places when I went to check them out. The developer and salesperson meant it, too. A housing bust can change minds…
Exactly, it was a temporary, unofficial statement of the reality of the time that was not intended to be a contractual commitment. The not-so-astute “investor” just didn’t realize it was an option that would expire just before she needed it.
You are forgetting the working motto of the day: “Lever up and double down.”
Never pay off a debt when you can leverage even more!
I wonder if the Courts will honor a verbal agreement by a salesperson that she could back out . She would have to have proof that the builders agent made that agreement . In California ,all real estate transactions/clauses
have to be in writing to be legally binding from what I have been told ,but you never know what a Court will rule .
IMHO ,one of the problems with this housing bubble is that to many verbal promises were made by commissioned salespeople selling homes and loans . I don’t like greedy flippers ,but the salespeople were lying alot and taking advantage of the frenzy .It’s a hard lesson to learn that you have to have contract clauses in writing .
I wonder if the Courts will honor a verbal agreement by a salesperson that she could back out .
I doubt it. One of the papers I remember signing in during a closing states that “the entire terms of the agreement is contained in these written documents” (or something to that effect) and that “any verbal statements from seller or broker aren’t legally binding” (or something to that effect).
This was a large-print document near the top of the stack of papers.
(I also, while it annoyed the crap out of the RE agents, had my attorney with me!)
I wonder if the Courts will honor a verbal agreement by a salesperson that she could back out .
The answer in all states is NO. The written contract voids any implied contract (oral).
essentially true, but i wouldn’t bet my life on it..
Throw my 2c worth of general commentary in here:
(1) Parole evidence (non-written evidence) is not valid in RE contracts. If it ain’t written, it can’t be enforced.
(2) Law school will set you back a minimum of 50K a year before any scholarships/fellowships (30K tuition&books + 20K living).
(3) Florida bar exam is generally considered easy, certainly much easier than NY, CA, or VA bar.
(4) Louisiana used to be the only renegade state relative to contract law, but it seems other states are catching up, led by Florida.
(5) This girl, like most new law grads, is an embarrassment to the human race.
Here in Norfolk, VA I strolled into the sales trailer (they spruced it up really nicely) for a huge condo tower project known as Granby Tower. The agents asked me to fill out a information card. It had the normal demographic information collection stuff, then it had some sort of waiver that said the sales people in no way represent the builder and whatever you get might be different. Obviously, not in those words, but a huge grin hit my face when I read it. A disclaimer that anything you hear could be wrong, on a $400K-$2million purchase.
I remember the Virginian-Pilot story/ad for the Granby towers that someone posted 12-15 months ago, highlighting the 20-something single career gal who would be “living in luxury while building equity,” or some such crap. (Downtown Norfolk is a hole, BTW.) Up until even a few months ago you still heard such poppycock on the radio in Jacksonville, always directed toward the single 20-something woman, the one with the 35K job but on some groovy career path, undoubtedly with a financial services company.
I mean, take your pick if you want to incur a quick 150K debt - law school or condo. . . but both?
Reminds me of a girl I met a few months back. Pretty girl, 31 or so, dying to get married and start a family, but surprise, she already has the house and mortgage but no man. I quickly ruled her out as a candidate for dating because: 1) her house was 60 minutes drive from work, and in the far, far exurbs; 2) the fact she owns a house would limit my mobility if we were to marry; and 3) I don’t want to spend the rest of my life paying (and driving like a zombie) for her feeling of independence.
I strongly feels those marketing campaigns prey on young women who, recently liberated from college, are looking to fill the void that only is filled by a fulfilling partnership for most people.
In Florida a Broker can get in serious trouble for “implied” situations. For example, if two brokers, having two totally differant businesses share an office and one of them violates a law, if it was not made perfectly clear to the client that the two Brokers, while sharing an office were not working in the same business, the innocent Broker can get in trouble also.
If you word your ads wrong, you get fined. Even if it is obvious that you did not intend any deception.
If you make a verbal promise to a client and the final agreement does not make it perfectly clear that the written prvisions of the final agreemnt supercede any verbal peomises, the Realtor could be held to the verbal agreement, providing there are sufficient witnesses and/or evidence as to the realtors statements.
An oral agreement is a parol contract and some oral contracts dealing with real estate are recognized by law as enforceable. Usually, an oral agreement is superceded by a written agreement, but not always.
As a practical matter an oral agreement is hard to prove and enforce, but you can be held to your verbal promise, under the right circumstances. Should Ms. Law Student obtained a written agreement? Absolutly! But she may have a case here. I don’t know all the details.
“Never pay off a debt when you can leverage even more!”
This is the motto of a lot of those “free” wealth seminars.
Whose bright idea was it to make a hungry lawyer think you stole $40,000 from them? It doesn’t matter who is right and who is wrong, this will not end well for the developer.
“About 40 percent to 60 percent of buyers are trying to wiggle out of their contracts, said Gary Poliakoff, a Fort Lauderdale attorney, referring to a dozen projects in South Florida that his firm represents, including Veranda.”
The law firm Becker and Poliakoff wrote much of the Florida RE law pertaining to HOAs and condos, or so rumor goes.
Sorry if this double posts
Jennifer you MORON……
Part of being a lawyer is you have to pass an ethics board, and they will use this lawsuit against you,saying you are NOT fit to be lawyer because you signed a contract and you tried to weasel out of it…
——developer had promised she could back out any time and her money would be returned———.
Geez you are so dumb, you could have READ the contract before you signed it. You might as well quit law school, since your stupid public lawsuit has tainted your law “career”.
I’m sure she has a very bright future in the personal injury business.
But the Law game is:
You can’t be a scumbag UNTIL you have your law license all signed and ready for framing!
Yes.. all lawyers are scum right? Unlike moron real estate brokers and slimy mortgage brokers lawyers can lose their licenses (that require more than a correspondence course over the internet to get) for committing ethical violations which tends to cause us lawyers to think twice before doing what a lot of folks we work with (see above) do every day upon rolling out of bed.
Everyone hates lawyers until they need one.
I think you missed the point Jill
Lawyers have to be squeaky clean no lying, no dishonesty, no cheating.. all gaps in employment verified.. I am a paralegal, but i would never pass the ethics review. I never did really anything stupid, never been arrested, or failed a drug test, i have safe drivers insurance for maybe 25 years, I just traveled a lot, worked for years under the table (wedding dj), and now making mp3 dvd’s of my music collection to pay next months rent. interspersed with some great jobs like working at Court TV all during the OJ trial and on Johnny Cochran & Nancy Graces tv show.
My experience has been, I’ve met good people and slimy people in every profession. The problem is we mostly hear about the slimy ones, because it’s more sensational. Just like the newspapers…the feel good stories are not on the front page, because that’s not what sells papers.
I’m not sure what your point was (seemed to be that lawyers are scumbags - I didn’t think my reading comprehension was that bad)
I’m admitted as well in NY - yes, the ethics board there is tougher than here in MA but I don’t think that gaps in employment would cause you to be unable to become a lawyer - maybe things have changed but that seems somewhat unfair if it is the case.
Sounds like your jobs are more fun than mine is so maybe I should have thought twice before going to law school.
Too bad that being a laywer right now is the new ‘johnny-come-lately’ career. I graduated college with computer science degree right before that all went to hell, I took the LSAT in 2002 and intended to go to law school but heard reports about the massive numbers of people entering law school at the time due to recession, and then switched to an economist, only to recently read it’s the number #1 degree in 2005. I can’t seem to win
BTW, I agree that all laywers are scum until you need one, and then they’re your best friend. Jeez.
I’m sure she has a very bright future in the personal injury business.
More like contract law, because she is about to get first hand life experience!
“‘I was disappointed that the developers and their agents went back on their word,’ said the 24-year-old Fort Lauderdale resident. ‘I just want my [$39,200] deposit back.’”
A 24-yo with no job and student loan debt. What’s the probablility that $39,200 was not hers to begin with, but mommy and daddy’s? I’d say 99.3%.
Unless she’s offering erotic services on the side..
I think we can safely go directly to 100%. However, I think your 99.3% is a good probablity that whoever she borrowed the money from will NEVER see a dollar of it again.
What? No takers on the erotic services on the side comparison with lawyers? I’m getting disappointed.
I am 99% certain that the 40k was on her credit cards.
These speculators who bought property in Florida totally amaze me with their thought process. They speculate, admit they intended to “flip” at some point, then when their gamble doesn’t pay off they want their money back. That, to me, is like going to Las Vegas, gambling on roulette or blackjack, losing your bet, then saying to the croupier, “Can I have my money back.”
However, I’m sure some slick lawyer will come up with something to get his clients off the hook - or somehow bribe the judge. Next up. Watching a slew of builders going belly up. The smaller guys first, followed by a few middle size builders and AT LEAST one big builder. Will it be D.H Horton, Levitt, Ryland, Lennar or maybe Beazer who are being investigated by the Feds I think.
There is no need to bribe judges. They have an incentive to assure their employment prospects once their term is up, they’re constantly currying favor amongst the people bringing cases to them as those law firms are their most likely prospects for future employment.
If you’ve ever wondered why judges seem so unable to think independently for the benefit of the taxpayers who “employ” them that seems to me to be the best answer.
Judges are lawyers first, last and always.
Make it be D.R. Whoreton! Make it be them! Them! Pleeeeeeeeeease!
“One woman is buying a Palm-Aire home for $270,000 that originally sold for $400,000 and carried a bank mortgage of $360,000. ‘The bank took the hit on $90,000.’ ”
Palm Aire is a nice community. The $270K purchase of the home that last sold for $400K is almost exactly the 31% median price drop mentioned earlier. Yikes!
Palm-Aire is nice but that area still has a long ways to go down. Her $270,000 house may be a $200,000 house in 12-18 months.
“He also is getting individual clients into homes. One woman is buying a Palm-Aire home for $270,000 that originally sold for $400,000 and carried a bank mortgage of $360,000. ‘The bank took the HIT FOR $90,000.’ ”
And what was your share of the pain, Mr. Realtor? Mr. Mortgage Broker? Mr. Loan Officer? Fair’s fair, and as a stockholder in a bank I would not think kindly of my bank taking the full hit. Maybe a 25% hit to everyone’s fees across the board, with a minimum 10% down from the buyer.
“Developers are not budging”
That is Pig Slop
Agreed. In fact, multiple clients have come to me this week and consulted about processes and procedures relating to people they are laying off. The number and timing is unusual.
“Developers are not budging” Fine, then neither are we, and we’re not holding on to unsold inventory
“‘This month alone, I have 150 sales of new homes that aren’t put in the MLS,’ Augustyniak said.”
Did anyone catch this in the article? You wonder why the small percentage drops in median price. If the big (50%) drops are not reported in the MLS the realtors don’t recognize them in their data. They’re slicker than Enron accountants.
But time is working against them, word will get out, just another element of price stickiness.
“If the big (50%) drops are not reported in the MLS the realtors don’t recognize them in their data.”
This would explain a lot about the Palm Beach County numbers. When you can walk into the Olympia sales office and plop $330K down and have a house built for you, it’s indicative that the median house should be well, well, below this number. The same can be said for a 4 bedroom home in Porto Sol for $299K. These homes don’t represent a median home in Palm Beach county where half are better and half are worse.
My experience is a typical house in a typical neighborhood is begining to yield between $100 and $125 per living square foot.
I am starting to see us cracking on that number as well.
Unfortunately for me, the “Force is strong” with my community.. We have had some 1/2 off sales, and tons of foreclosures and REO property. More renters than owners on many blocks (imho) and about 1/4th of the entire community for sale right now..
Evergrene has reached a permentely high plateau?
BTW, just for comparison, the home I live in sold for ~275/sq ft (living) in 05. So, imho, this house is probably going to MORE then 1/2 in value. This is by FAR the most expensive home on the street, we are close to the train tracks (where are busy) and in the “less nice” section of the community. I would start to get interested in this home at around 250K, and would really start to think about it at 225K.
So, still a long way to go in the newer, gated, kool aide fueled communites here in the Palm Beach Gardens.
“So, still a long way to go in the newer, gated, kool aide fueled communites here in the Palm Beach Gardens.”
It’s the older Gardens communities with big lots and original owners that interest me. They show well, crime stats are low, prices are outstanding. My wife and I would consider renting out our current home and buying one in this type of neighborhood…but we’re going to wait until we see signs of bottom first.
“The glutted inventory of unsold homes includes 405 properties priced at $1 million, compared with 225 in March 2006. Moore said homes costing $1 million or more now take about a year to sell.”
Gee does that mean it will take 405 years to sell this inventory?
(Sorry, tis Friday)
Isn’t anyone else distressed by the fact that an allegedly bright young potential attorney isn’t talking about contracts and covenants and written obligations, but is talking about their “word?” That strongly suggests to me that she was suckered and there’s no written undertaking by the seller, in which case she’s stuck with the contract itself (assuming a merger clause was put in it, which is close to 100% on standard builder sales contracts).
As for the alleged release, if it actually exists in writing, if one was induced into the purchase contract by an enforceable promise of a refundable deposit, there are two primary legal outcomes. Either a) that program never existed or the builder never intended to make good on that program or their representations, in which case there was fraud in the inducement of the purchase contract and it is void ab initio, or b) the program and buyback promise existed, but the construction company desperately wants to pretend like it never happened. Unfortunately for them, principles of estoppel should bar their efforts and the deposits should be returned.
This is Florida, however, so their actual mileage may vary.
As I mentioned above, I VERY highly doubt she came up with that deposit herself. As a 24yo in law school, she almost certainly has not had a real job, and is either deeply in debt from undergrad and law school or is receiving some ginormous economic outpatient assistance. It follows her deposit was Mommy and Daddy’s money, too.
She’s going to go through her entire life in debt and with an incorrigible sense of entitlement. And she’s going to be among the 70% of lawyers who hate her job but can’t quit becuase nothing else pays as well. Rinse, lather, repeat for the rest of her adult life unless she charms the right guy into marrying her. What a way to live life.
Isn’t anyone else distressed by the fact that an allegedly bright young potential attorney isn’t talking about contracts and covenants and written obligations, but is talking about their “word?”
No I’m not at all distressed…ol’ crackhead dummies never worry about contracts and covenants and such.
Palmetto posted:
The law firm Becker and Poliakoff wrote much of the Florida RE law pertaining to HOAs and condos, or so rumor goes.
If that is the case, I predict:
WestCity Partners, Inc: 1
Jennifer Wigand et al: 0
Please scratch out the words Bright and Potential….just stupid is pretty accurate..
Ann
while sanding the 30yr old brown paint off my nice wooden beam staircase, I got to thinkin ’bout some things, which you touched upon, mainly . . .
any decent law firm is going to check out their candidates nine ways to sunday. and back. Credit check. maybe a poly. probably check facebook or myspace for any past nutty history that she didnt reveal. probably even run something as simple as ” the google ” (pres bush term) just for the hell of it. even some potential clients will search her name. $400hr? effin eh!
so then, what happens? OF COURSE her name pops up related to this little adventure, complete w/her stupidity & greed.newsflash. law firms dont like stupidity. clients dont pay for stupidity. agressiveness, greed, avarice, tenacity, duplicity all ok. mediocre performance also ok as long as the billables are kept up.
I see a long internship for this young lady. pro bono mandatory. she’ll have to earn her chops. unless she is an ivy grad. or has daddy’s connections.
still, quite embarrasssing for her future field of employment.
Aquis,
Those were my thoughts, too. For $39K she greatly decreasing her earning power for years.
“‘We expect thousands and thousands of people to move into South Carolina,’ Kremydas says. ‘We don’t have enough houses for them right now.’”
You don’t have enough water for them, either.
You got that right. The same goes for GA,CA, AZ, CO, NM and NV. I think a lot of people just don’t get it about water. Even Florida is having serious water problems.
Oh, and they won’t be bringing any money with them, either.
That’s the biggest change I have seen here in Upstate SC. We are getting a ton of new people relocating here, coming in with old rusty minivans, etc. with OH, MI, FL plates. So many of them don’t have jobs lined up when they move here, have no real skills, and end up working at McD’s.
This is very different from the in-migration we saw in past years when people moved here mainly to take good corporate-type job offers, and could benefit our local economy more.
just how many damn McDonalds’ are there in SC? Is this a future unemployment problem, which if so, would make expensive Florida housing with job > cheap SC housing and no job.
I’ve never understood the general migration patterns where people move to lesser paying jobs to spend less. There has to be more to it than money, but the MSM only talks about a $115,000 house in SC.
And we don’t want most of them.
–
A BOOM in creating excess inventory…
Census Data On Housing Inventory Is Out:
http://www.census.gov/hhes/www/housing/hvs/qtr307/q307tab4.html
Here are number by doing the simple math of subtracting 2006Q3 from 2007Q3:
2007Q3, YoY Change, Thousands
Total Units 1,965
Total Occupied 670
Total Vacant, Year Round 728
Total Vacant, OTHER 384
An economist insists that the demand is 1.7M annual rate. Various economists put the demand bet. 1.65-1.90M annual rate.
I threw in the data in the pot and with some magic and witchcraft I also come up the annual demand of 1.7M units a year. Just to double check, I called Dr. Crooked Snake and he also threw the data in his pot, did some mumbo jumbo, and he also came up with the demand 0f 1.7M, accurate to three digits. There are secret recipes to calculate demand from the actual survey data. It took me this long to get one.
Jas
–
BTW, the Total Vacant Units are 17.89M!!!
Jas
“Ori Onn, a real estate agent, signed a contract in 2005 to buy a one-bedroom Phase One condo for $295,000. He put down $59,000 and like Wigand, he planned to flip it.”
It looks as if many realtors like Ori Onn were in on this game of flipping property based on the records I reviewed. The realtors who knew about certain properties before the general public heard about them. They then bought up these properties and flipped them for a significant profit to other investors or “end users”. The reward was both profit from flipping, profit from listing the property and profit in commisions.
This is the game that was played and it artificially increased prices beyond the incomes of the end user. He will lose his $59,000 deposit as well as the law school student will lose her $39,000 desposit due to contractual reasons.
Both will soon learn the lesson that greed does not always pay!
The double escrow game was being played by real estate sales agents and flippers alot during the boom . The plan is to never close escrow and just sell to a new person before the original escrow closed ,therefore the flipper buyer never has to take out a loan .This double escrow practice raised the real estate prices far beyond true value and the lenders generally didn’t know about the original contract .This double escrowing practice was really pushed by seminars during the boom and it’s a major conflict of interest for a listing real estate agent to do this .
Which made me think a couple of days ago, when there were comments made by Realtors(tm) about encouraging sellers to pull properties off the market to shrink inventory: ANTI-TRUST SUIT.
Realtors are a illegal organization. They are trying to control the markets by controlling sales and inventory and are involved in INSIDER SALES. There should be a suit against the NAR as being a criminal enterprise.
This would correct the market by allowing a free-trade market to return.
There should be a suit against the NAR as being a criminal enterprise.
There already is a lawsuit against the NAR by the department of justice (DOJ) pertaining to commisions. Stay tuned, more to come!
“Which made me think a couple of days ago, when there were comments made by Realtors(tm) about encouraging sellers to pull properties off the market to shrink inventory: ANTI-TRUST SUIT.”
No, no, no. Haven’t you noticed that antitrust suits are only brought against efficient and innovative companies by their losing competitors (I’m not kidding, look at the sordid history of antitrust, from Alcoa on…) The NAR is neither efficient nor innovative (though they DO seem to be effective at lining pockets with ill gotten gains, but that usually counts as a plus in antitrust), so I would not hold my breath on seeing any real antitrust success against them.
Haven’t you noticed that antitrust suits are only brought against efficient and innovative companies by their losing competitors…
Hm, like Microsoft. Yeah, they were pretty efficient–at breaking the law with their OEM extortion contracts. (”You won’t be needing those other operating systems … Don’t let us catch you selling OS/2 or Linux out the back, or Vinny will be by to hurt you. He enjoys … hurting people.”)
I guess in the USA you are a loser if you play fair, or at least play legal. All hail our robber baron overlords.
“Hm, like Microsoft. Yeah, they were pretty efficient–at breaking the law with their OEM extortion contracts. ”
You have me on that one. May Microsoft be infested with the fleas of a thousand camels. I should have said that the gov’t only breaks up companies that are well-run and efficient (Standard Oil, ALCOA, etc.).
Now that you have brought up Microsoft, a major peeve of mine is how hard it is to get a good (inexpensive) ‘naked’ computer that I can install Linux on. For instance, Dell etc. ought to sell computers sans Vista for less than those with Vista (after all the %^**&^ EULA says that you can remove the OS for a refund. Yeah, ever try that…) Grrrr. *foams at mouth*
Homebuilders made about $10M in political contributions in both 2004, 2006. They gave 76-78% to Republicans.
http://www.opensecrets.org/industries/indus.asp?Ind=C02
Methinks that the current Republican adminstration is slow-walking this suit. After all, if the sacred NAR goes down on their watch, they’ll be in deeper tapioca than they are already.
However, if the Democrats take back the White House in ‘08, watch this suit make a leap to the front burner. I think the REIC — and their enablers on Wall Street — will be one of their big targets.
Just my US $.02 worth…
I don’t see where either of your scenarios is necessarily bad.
Any GOP types in bed with the NAR deserve to go down with that ship, IMHO.
Where do you think the NAR built their new Taj Mahal a few years ago. As close to the capital as possible.
Capitol.
Which made me think a couple of days ago, when there were comments made by Realtors(tm) about encouraging sellers to pull properties off the market to shrink inventory: ANTI-TRUST SUIT.
It probably is an anti-trust violation. Realtors in an area are not allowed to get together to set commissions or prices.
Pulling property off the market now is hopeless.. it will only prolong and increase the inevitable pain their sellers will suffer.
If NAR is determined to destroy it’s reputation as a source of valuable market insight and expert selling technique, I wouldn’t file suit to stop them.
‘The bank took the hit on $90,000. So I look at that as a positive effect on my buyer,’ he said.”
Not until that buyer realizes that they stand to lose at least $70,000 or more on this so called great deal.
I was reading the posts on the Sun Sentinel article (about Jennifer the flipper), and almost died laughing at this one. I must be easily amused…
Older Post:
“Experienced Realtor wrote:
I thinks it is hysterical how every single time the Sun-Sentinel prints some anti-real-estate propaganda pieces like this all the bitter renters come out like a bunch of cockroaches feasting on a sugar cube.
I’ve been selling real estate for 30 years here in South Florida. Every 10 years ago, the local liberal media goes on a campaign to devalue real estate. They do this because the pinkos at the local newspapers think that everyone including retail cashiers should be entitled to a SFH in Weston. So, the local newspapers go nuts, printing daily reports of the trouble market.
Yeah, the yellow journalism tends to work for a couple of years (just like it did in the mid-70s, the mid-80s, the early 90s and late-90s) and the market devalues for couple of years.
However, then we simply return to fundamentals and real estate starts going back up here in South Florida.
Enjoy your feast on the propaganda for now all you bitter renters. In a year or so, when the market fundamental return and real estate starts climbing back again (as it always does), all the cockroaches will scatter back to their pathetic rented apartment.”
Blitzkrieg replied, in the only possible manner:
“It is hard to believe how incredibly stupid you are. Stupid as a stone that the other stones make fun of. So stupid that you have traveled far beyond stupid as we know it and into a new dimension of stupid. Meta-stupid. Stupid cubed. Trans-stupid stupid. Stupid collapsed to a singularity where even the stupons have collapsed into stuponium. Stupid so dense that no intelligence can escape. Singularity stupid. Blazing hot summer day on Mercury stupid. You emit more stupid in one minute than our entire galaxy emits in a year. Quasar stupid. It cannot be possible that anything in our universe can really be this stupid. This is a primordial fragment from the original big stupid bang.”
blitzkrieg is GOD !
( ok, after Neil on A.M. radio. is he still on the air? )
Considering that people who rent are “Experienced Realtor’s” future customer base, that rant was very unfortunate. And frankly, the boom was based in part upon extravagant sums of money being lent recklessly to retail cashiers after the Sun-Sentinel and other news outlets unquestioningly propagated the views of people like “Experienced Realtor.” That guy did everything but blame Clinton!
Snake charmer, the thing is, he didn’t identify himself. When “bitter renters” show up in his office wanting to buy a house, he doesn’t trot out this anti-renter rant.
For those of you who aren’t familiar with the area, the two properties discussed in the first article aren’t worth a fraction of what they are supposed to pay.
In the article, Jennifer Wigand was to pay $392k for a two-bedroom condo and Ori Onn (the Realtor®) paid $295k for a one-bedroom in Plantation, a suburb west of Ft. Lauderdale.
Note this area in NOT in downtown Ft. Lauderdale (Las Olas) area. This is NOT down by the beach. There is absolutely nothing hip, exclusive, or upscale about Plantation, especially in the area where these condos were built.
Even at the very peak of the market in 2005, these condos were NEVER worth even close to that amount. At the very peak in 2005, three-bedroom, single-family homes in nice neighborhoods were available in Plantation for less than Jennifer Wigand’s purchase price.
For the life of me, I can not figure out why in the world these people signed contract for this price. It makes absolutely no sense whatsoever.
Oh god no. A 1BR in Las Olas is probably overpriced! Out in Plantation, you must be using some really good drugs to even CONSIDER 300K for a 1BR.
Units like this are the ones that are going to see the most depreciation. It’s just like the condo tower I put up here all the time (1M dollars in the mall parking lot). There is NOTHING to justify the price other then the idea that some idiot will come along and pay more.
I would not be at all suprised to see condos in Planation similar to the one mentioned above under 100K at the bottom of this bubble. And, although that sounds nuts, you have to realize, these are the units that are for the people who don’t make the median household income in our area.
50K is about median, if you are making under that… Guess what? 100K is pretty much all you should consider spending on a condo! That is the market that will eventually be served by units like this, imho.
Jennifer the would-be lawyer, and her pal Ori, the dopey RE agent, will find new friends when their condos turn section-8.
They don’t sound smart enough to be drug dealers, but maybe they could do some legal work for the underage hoppers.
What in the hell are 24 year old students doing investing in condos?
They’re not; their parents are.
My mom went back to college for a MS in public health and heard all about how spoiled rich kids hide assets in order to qualify for financial aid. One student bought a $50k yacht.
Mom was raising 3 kids on less than $20k per year, but since she had enough savings to pay tuition she didn’t qualify. By the end of the degree she was broke and there were no jobs in the area. Fortunately she still had an active nursing license to get her by until her kids were out of the house and employed, she then moved in with us and we helped her get a useful degree at the community college.
My mother still tells a story from when she was a mature-age student in the 1970’s, in a similar situation. (Dad’s income was enough to disqualify her from any form of assistance, but with mum at university and us 4 kids at school things were quite tight.)
Anyway, mum’s on a field trip and one of the other students who came from a farming family and was getting “low-income” assistance starts suffering from travel sickness on the bus. (Quite genuinely; mum knew the girl a bit from group assignments, and liked her.)
So this “low-income” student rings home during the next meal break, and arranges for one of her brothers to collect her in the family plane and take her back to campus.
Anyway, mum’s on a field trip and one of the other students who came from a farming family and was getting “low-income” assistance starts suffering from travel sickness on the bus.
We’ve got a lot of multi-million dollar farms in our area. The small farmer farms on the side and works a regular day job.
‘We’ve got a lot of multi-million dollar farms in our area. The small farmer farms on the side and works a regular day job.’
That’s all over the place, and it makes me wild with rage. Enraged cubed, even.
For every person abusing the system, there are two that are working hard on the family farm. What is wrong with a farmer owning a plane?
Especially big are hobby farms around here. Get a cow or two on your 1 acre lot in your backyard, and you are suddenly an agriculture household and get all kinds of tax breaks. Do some people abuse it? Of course, but until you’ve owned livestock or farmed, you don’t have the slightest clue what a PITA it is…..ever heard of a farmer taking vacation? Not gonna happen if there are animals to watch.
What irritates me is the city yuppies driving up the price of the land and other goods to play farmer, when it’s obvious they haven’t a clue what they are doing, but they sure have the King Ranch F250 4×4 and air conditioned horse trailer.
Nothing wrong with a farmer owning a plane.
Everything wrong with a farm family or anyone else who can afford to run their own private plane and simultaneously qualify as disadvantaged.
This was not a crop-duster, and was not required for their farming. I asked. I acknowledge they were far enough out so it turned a 2-hour drive to the nearest town into a 20-minute flight, but that still makes it a convenience rather than a necessity.
Actually, now that I read the article again, it sounds like she was 22 when she signed to buy the condo. Still an undergrad!!! Any guesses on what fine academic insution gave this dumbell a degree?
The market makers were hitting up students and anybody they could find to engage in the “real estate only goes up game “.It didn’t matter if the student could afford the house/condo or not because the plan was to double escrow the transaction or put the buyer on a toxic low down loan that they didn’t qualify for .
I believe a good portion of those seminar groups were financed by builders and investment groups that were right there to make suggestions on projects that the sheep should invest in (remember how they use to bus investors to projects ).All these projects needed was a bunch of sales on the books to get the financing from the bank to proceed with the project . Looks like the lenders didn’t take a close look at the buyers of these projects, so you end up with projects with 75% specultors ,which are now vacant .I bet in alot of cases the buyer didn’t even live in the same State . They hit up alot of retire people with the promise of quick money . They hit up people that need money .
“‘We expect thousands and thousands of people to move into South Carolina,’ Kremydas says. ‘We don’t have enough houses for them right now.’”
If those thousands and thousands of new people they expect to move into SC are like the thousands and thousands of new people expected to move into NC, SC RE agents had better start learning how to speak Spanish! (cynicism off)
my bestest guess is Hills Com College Ybor Campus gave ‘ol jen a degree for just showing up to classes with her obligatory starbucks status cup in one hand while enduring the horrible masses in her daddys benz talking on the celly to tiff & biff about where todays beach time … err study break was to be held.
she then took the 2 year degree, and bank acct, crosstown to USF, landing right in greek row to finish up in high style munching on Einsteins bagles and more clearwater beach study trips. oh the horrors of a FL education !
no child left behind, dontcha know
LOL
“‘If people are waiting for the times when … every month was a record, it will be a long time before we see that again,’ he said.”
WRONG! There are new records they’re just a different kind of record.
“Wigand’s two-bedroom, $392,000 condo is scheduled to close on Oct. 30. She said she will forfeit her deposit if the court does not grant her relief.”
Can she do this? Could she even afford to close, it seems like she would have at max $0k income per year right now? Do you blame the developer for taking a $40k deposit from someone with no income, or the person with no income would puts down a $40k deposit? How about both?
How stupid are these condo buyers?
I decided to run the numbers on buying a condo in Gainesville for your college-going child. This is supposed to be a big market (har har) and, actually, a good number of equity bandits did buy condo conversions in 2006.
Typical asking price: $150K
Typical rent: $750/mo. (this is a good proxy for the utility of our little money pit)
Assume: 10% down (why tie up your capital in real estate?), 6.5% 30 year mortgage (parental credit rating, natch), and, since the parents hold the note, it is not a primary residence so bye-bye homestead exemption.
The condo is held for four years and then sold. The real estate agent is paid 7%. In that time, the property “appreciates” at an inflation rate of 4%.
The monthly payment is $853.29. Total overpayments will be $4,957.92.
Taxes: bad news: combined millage rates in the City limits come to 19.2712. Taxes start at $2,890.68 in the first year, and by the last year come to $3,381.69 annually.
At the end of four years, the condo is sold for $175,478.78, the equity between downpayment and principle payments (an entire $157/mo by the end!) is $47,148.36 and the RE agent takes $12,283.51, leaving $34,864.85 in “profit”.
But wait–not counting maintenance OR HOA’s and assessments–you have overpaid by $12546 (taxes) +$4958 (payment over utility) = $17504, meaning you only really cleared $17,361.
So far the bank has been paid $34,288.43.
Uh-oh, let’s add in closing costs. Say you got off easy–$1000. You: $16,361; bank: $35,288.
Wait! You brought that $10,000 to the table initially. So your return is only $6,361 (again, not counting HOA’s or assessments–an HOA of $80/mo would cost you $3,840 in four years).
Okay, so that sounds good … about a 12% return (with no HOA) … but at what risk?
Roof repairs–$10,000 assessment. Oops, goodbye principal.
HOA — hmm, looks like our return is cut to 6% or zero.
Market stalls or goes down. Oops.
Rents drop. OOPS.
One more thing–many $750/mo apts have some utilities included. Water and sewer is typical (about $15/mo), and sometimes you can get internet included or at reduced rates (about $25-50/mo off). If you “go condo”, you pay all of that yourself. Like with the HOA, bye-bye profit.
Spending hours, days of your life trying to sell a creaky old condo in a down market: priceless.
The simple(for most of the people on this blog) financial analysis you just did is far more extensive than most RE specuvestors ever do. Jenny would look at you analysis and say “Ewwww. Math is icky. I wanna starbuck’s. RE always goes up. Tee hee!” and then buy the property.
““When Jennifer Wigand put down a deposit in 2005 for a condominium, she hoped to quickly sell it and use the profits to help pay her law school loans. Then the housing market plunged. Wigand said she wasn’t worried because the developer had promised she could back out any time and her money would be returned. But in July, when she asked to take part in that program, Wigand said she was told it had been canceled.”
“‘I was disappointed that the developers and their agents went back on their word,’ said the 24-year-old Fort Lauderdale resident. ‘I just want my [$39,200] deposit back.’”
This one is DEFINITELY going to flunk the bar exam!
The law of contracts is a required first year course. The law property is a required first year course.
In the 2nd week of classes, you learn about something called “The Statute of Frauds” which is all about when a contract must be in writing to be enforceable. This concept is fundemental contract law and property law in 49 states. (LA comes from the Napoleonic Code, not English Common Law.) Three of the things that require a contract be in writing are:
(1) it involves more than $500; or
(2) it involves the sale, purchase or use of land; or
(3) it will take more than 1 year to carry out the contract.
If it falls in any of those categories, the terms of the deal have to be in writing. If something is said but not put in the final contract, it does not count.
She is buying a condo (real property involving land.) The deal started in 2005 and apparently she isn’t in the property yet as she wanted out in 2007 (more than 1 year to carry out the contract to sell her the condo.) It involved more than $500 (deposit was $39200.)
She put up the deposit. The developer is building the condo relying upon her contract to purchase it. The developer relied upon her performing the contract to its detriment.
If she has to go through with her contract, she ends up with a condo at the price she agreed to pay.
If she gets out of the contract, the developer is out the money to build the condo (plus paying taxes etc) until they can find another buyer – and if they don’t get the same price as she agreed to pay, then they lose money there too.
She is screwed – and extremely stupid and not even paying attention in class. A court is going to hammer her because she was a law student who had taken or was taking Contracts and Property and thus more knowledgeable than Joe Schmoo of the street.
I would never hire this one as an associate. (I myself got 1 of the only 5 A’s in property law that the professor gave in 25 years of teaching. Wouldn’t want someone so stupid that they didn’t even learn the basics of the first 2 weeks of classes working for me.)
She was most likely a first year student when she signed the contract. I was 21 when I started law school.
BTW, money can’t leave escrow unless both parties agree to it.
Why didn’t these FB’s make these contracts subject to being able to qualify at closing time because that would get them out of the deal . To make a deposit on a house/condo that is built 1 to 2 years in the future that requires financing in the future is taking on to much risk . The builder contracts were drawn up for the frenzy because nobody would go along with these one sided builder contracts that were signed during the housing mania .
Also , I have never seen such big deposits put down by people .
Also, I would imagine that a certain amount of interest money was made on that escrow account during the long escrow period .Who gets that money?