Posted by Randy on September 20, 2003 at 08:37:11:
Make an offer? I wouldn?t expect the Realtor or the builder to accept but you can certainly make an offer. The challenges you face are multiple, first the Realtor only gets paid when the property sells so unless you?re prepared to pay the 6% realtor commissions up front upon acceptance of your L/O the realtor won?t take you seriously.
Secondly the builder is probably operating on a construction loan at around 10% that allows him to buy materials and pay his crew salaries; he gets paid his profit when the home sells-the homeowner gets a mortgage, pay?s off the underlying construction loan and builder profit?s. So unless you can cash flow it at this high cost of money and he can wait for his profit?. With the current state of ?cheap money? for homebuyers I?m pretty sure that?s why he chose to build the other two now.
The third challenge is your expatiation to buy at 65% LTV. Typically there?s not that much in the deal for the builder, 10%-20% of the selling price is more realistic for builder profits. I doubt he?s willing to ?Give Away? all his profits before trying to market it retail. I my opinion the time to have done this was on the one that stood empty for a year? just before it sold retail ? that ship has sailed.