Is this a sign of confidence? Or desperation?You decide.
Certain builders in the Denver area are wooing buyers by offering to buy back properties if their values drop, according an article appearing this past Sunday in the Denver Post.
For instance, Celebrity Custom Homes is putting 10 percent of the purchase price of each home into an escrow account. If the home's value has dropped after three years, the buyer gets the money. If not, the builder keeps it.
Everest Development Co. is telling buyers that if they live in the property for three years and if at that point, its value has declined, they can choose to have Everest repurchase the home.
Byers Street Properties is offering to refund a percentage of the purchase price of any home equal to the decline in its value based on the S&P/Case-Shiller home price index.
The list of builders that have gone bankrupt (Village Homes, Neumann Homes), scaled back operations (McStain, Richmond American) or announced plans to leave the state (Centex, Beazer) is historic and remarkable.
Right now, there's one segment of our market that's robust - buyers looking at homes under $250,000 (and homes at that price point are generally not very profitable for builders).
Markets change... they always do. But I'd be careful with an offer like this, because if these homes do go down in value, will the builder even be around to take your call?
