Just yesterday I took a client to a Kimball Hill neighborhood in Alamo Ranch, which in in San Antonio, TX. We were actually just trying to get her an idea of what her $150k of buyer power could pull in during a buyer’s market. As we walked into the model home she whispered to me, “There is no way I can afford to live in this area!” I asked her to just hang with me and see what the on-site sales guy could show us. He jumped right into his sales pitch, which I might add was nicely done without any pushiness, and proceeded to direct us to a home built on speculation that was about 1600 square feet and was originally listed at about $160k. He then told us that because Kimball Hill was shutting down operations the home was discounted to $139k, well within my client’s budget. The only problem – she didn’t fall in love with the house. It was nice, no doubt. The neighborhood offered more than she thought she could get, but the fact was the house just didn’t “do it” for her. I took a look at list of available homes and saw one that was 1900 square feet and had originally been listed at $189k, but was marked down to $157k. No too far out of our range, but still a stretch and really more than we were comfortable with paying. The on-site guy said there was an additional 2% he could take off any home so we were getting closer. “Let’s just check it out,” I suggested. The home was AWESOME! The floor plan was just right, the ceilings were taller than the first house, it had a study, and upgrades galore. Now our only problem was the price. $150k was the absolute top my client wanted to spend, and I could tell that would make her uncomfortable. On top of that we weren’t looking to buy something ready so soon as my client is in a lease, but she just fell in love with a great house. So what did we do? We made an offer. Our offer was $145k with a $1200 lease buyout. That would get my client out of her lease without any additional funds coming from her pocket and put the house in a much more comfortable range for her. And guess what – They accepted the deal just as we wanted! Why? Because Kimball Hill is going out of business. Just like when any store goes out of business things are on big-time sale. This house was originally priced nearly $45k more than she will end up paying.
My point – Just because a builder is going out of business, don’t shy away from a potentially good deal!!
What to remember:
You need to remember that the builder is going out of business so if you have an issue with the house after you close they will NOT be around to help you out. With this in mind, MAKE SURE they have purchased a third party warranty for you. The warranty my client is getting is actually BETTER than most builder warranties.
You also need to remember the importance of a third party inspector. The builder will still be in business when we close so before that we will have a third party inspector go through the house and identify any items that need correcting. Between that and the warranty we should be in as good a shape as we could hope for, because at some point any builder could make an announcement that would prevent them from being around in future.
This is a tough real estate market. Many builders jumped in when the getting was good, but now that money is not being thrown around like before they just can’t make it. Maybe you can make a deal that would put you in a home or neighborhood you previously thought was way too expensive for you. Always work with a qualified Realtor who can guide you through the process, make sure the builder offer a warranty from a THIRD PARTY, and never buy a house without an inspection from an inspector you hire (not just one a builder offers).
If you live in San Antonio, TX and are looking to buy a new home, or a pre-owned home, I’d love to work with you to make sure you get the best home you can afford. PLEASE, call or email me anytime!
CHRIS COWLEY
www.CHRISCOWLEY.com
210-389-6006
chris@chriscowley.c0m
San Antonio Real Estate Update 