October 9, 2008

Homes On Esprit Park: Now Offering Refundable Purchase Deposits

While no longer offering price guarantees (sign of the times one), the Esprit Park sales team is back with another offer: refundable purchase deposits (sign of the times two).

When you purchase a residence at Homes on Esprit Park and secure a loan commitment to purchase, you should be moving forward towards a positive and exciting close of escrow and move-in. However, if your lender should change their qualifications or loan programs or your financial situation should change and you no longer qualify for your loan (up to 10 days prior to close of escrow), we’ll guarantee the full return of your 3% deposit* no questions asked.
In addition, should you simply change your mind about purchasing your home, find another home that you prefer to purchase elsewhere or just need to walk away for any personal reason whatsoever, we’ll guarantee the return of 75% of your deposit, again, no questions asked.

A bit of the fine print (i.e., asterisk): “Less an escrow processing fee of $500…Deposits made for buyer selected flooring upgrades and glass enclosures are not refundable.”

No word on whether or not those who acted early will benefit from the program as well.

A Price Guarantee From (And Proof Of Price Reductions At) Esprit Park [SocketSite]

First Published: October 9, 2008 7:00 AM

Comments from "Plugged In" Readers

At least they are being civil and decent about this. The escrow fees and deposits on upgrades have never been refundable, at least I don't believe so.

Posted by: view lover at October 9, 2008 9:16 AM

Then why bother with the charade of a deposit? Why not just drop the deposit by 75%.

I'll tell you why: Because the developer really, really, really needs cash.

Posted by: tipster at October 9, 2008 9:31 AM

I have not been by this development for a while. Any real progress on the North building? They seem to be about 8 months behind on the original move-in date for the South building and the entire process has seemed to stretch on and on.

Posted by: mktwatcher at October 9, 2008 9:44 AM

Tipster,

Would you ever consider actually taking the time to set up a contract with someone if they weren't going to at least let you cash a check for a good piece of money? without a deposit any condo shopper could come buy and essentially reserve a unit while they shop the city for a condo deal they like. With deposits, even if a developer will refund it, they can't afford to do that. It would be completely stupid to not take deposits. Charade? Please.

Considering the remarks yesterday from one poster that lost a deposit at Arterra and another that had to get an attorney at The Hayes I think this shows some class on the part of the developer. But it's great that you find a way to crap on them for it.

Oh, and a developer needs cash eh? Wow, that is insightful.

Remember, this is my pig with lipsick you're talking about here. How are your bike tours going?

Posted by: Boo at October 9, 2008 9:48 AM

Look, a 3% deposit is totally standard in all real estate transactions. And it's "nonrefundable earnest money"--to show you are earnest in planning to buy the property. I agree that the developer is being very civil here in prospectively signalling that they won't play hardball with buyers' $20-40k if they back out of a transaction. Look, assuming this place starts to close escrow in what, a month, it will possibly be the worst time in history to try to get people to close on new construction condos. Maybe by showing there are humans working at the development company they will actually do ok. We'll see....

Posted by: parkster at October 9, 2008 10:12 AM

They are being decent, because they have to. That said, when I toured this development back in August I thought it was very nice. Overpriced as most places still are, but I liked the park across the street and its a quiet spot although close to a lot. (well, quiet if you are not on the side with the freeway ramp) But that didn't seem to cause a lot of noise the Sunday I was there.

Posted by: CameronRex at October 9, 2008 10:18 AM

This is not Esprit-specific but relevant. Heard some second-hand rumors that many of the newer developments in Soma/Potrero are indeed facing liquidity issues. Supposedly their financing sources are set to dry up, diminish, or start charging big fees if a certain number of units aren't sold by the end of the year. They have to make a certain quota by year end or incur penalties.

So look for silent fire sales starting in mid-November to close stuff by end of year. Again, this is one of those "guy I work with heard from someone" kinds of rumors. Could be accurate, could be complete BS, and I have no idea which projects may be affected. Guess we'll see in a month or so.

Posted by: Dude at October 9, 2008 10:26 AM

Kudos for them. At least they are being flexible on their stance.

Posted by: Ryan at October 9, 2008 10:32 AM

I have recently bought in this development and I am so excited - I looked at almost all developments in in SOMA, MB and some of the newer projects in Nob Hill. This was the only development that did not give me an "ick" feeling when I walked through the door (well ok - 1158 Sutter St didn't give me the "ick" feeling but the mortuary across the street did).

Lots of developments are behind, stalled etc these days. Pile on the financial chaos of today's market and its really not a pretty picture. So as I need a roof over my head soon, and I am looking to be here long(ish) term, I bit the bullet and signed on the dotted line. Did I overpay? Most likely. But I am very happy with my unit and its location in the development (YES - i.e. not the very last "close out" units with no sunlight and sitting on the freeway ramp).

I have met the builders and developers of this site and they really did impress me with their thoughtfulness and vision for the whole project. I think its refreshing that a developer would show that kind of flexibility towards its buyers, when most of the cards are stacked very much against buyers even in down markets. I've haven't heard of another developer doing this (I could be wrong) and some of the developments where I visited made me feel like they were doing me a favor to even talk to me (170 off Townsend, I'm looking at you!)

Since some of the developers will actually be living there when the project is (finally) finished and maybe they don't want to risk having to contend with grouchy neighbors :) .... or simply that desperate times call for desperate measures... In any case kudos to EP for showing leadership here.

Now please go finish the south building so I can move in already!! :)

Posted by: MissSunshine at October 9, 2008 10:43 AM

I do like this development compared to many others - I have done the official hard hat tour twice here and even snuck around the place without a tour guide another time when they weren't looking.

But I find it pretty hilarious that some of you are saying that the developers are "being civil and decent" and "classy" about this. LOL. They are doing this because the need to try anything and everything to start moving these overpriced units! Read through the messages people. Desperate times are here and the desperate measures will continue to get more desperate!

That being said, I do like this development. :)

Posted by: dg at October 9, 2008 12:49 PM

dg, you're absolutely correct. If it was a seller's market out there then they wouldn't do this because the desosit weeds out the shoppers and locks in the buyers. You take a deposit so that you don't waste your time, you unload the units, pay off your construction loan, reduce your carrying cost and increase your return and get richer.

But it's not a seller's market. So if they wanted to they could be a pain in the ass and make sure they get that cash that tipster was talking about. But they're not. They're actually telling you that they won't. They're not even making you negotiate. They're making it user friendly. Why is the idea that that is decent thing to do so "hilarious"?

And have you tried to negotiate a purchase with them? Do you even have any idea of what the contract prices are for the 20 plus different unit types? Seeing as how they haven't even closed their first escrow yet? I'm guessing you have no idea. Or maybe you're looking at asking prices and asssuming those are what they're selling for?

I'm a little pissy today. Sorry. I just hate seeing the stock market take a 500 point crap every day. It's like watching a car accident in slow motion.. can't... look... away...

Posted by: Boo at October 9, 2008 1:40 PM

Most developers keep the 3% deposit, regardless of market conditions. They don't have to return it for any reason, but these guys are doing it. That is different! Don't call it civil or decent, but be fair, you can't call them the average developer needing cash. They need the cash any way they can get it, but they are not keeping it when a buyer puts it up front and then changes their mind. How does this attract buyers anyway, if the deposits were already made, the buyer already had been through the doors and signed a contract. They are getting an opportunity to walk away from it without the usual losing of the deposit.

I'm truly surprised by the negativity, I though some of you were a little more enlightened based on previous posts, but damn, is it the market crash that has made you all so cynical?

Posted by: view lover at October 9, 2008 2:20 PM

Does anyone know if this applies to everyone who has put a deposit down or only to new deposits? In my opinion, it would be pretty dishonorable if it were to apply to only "new" deposits.

Posted by: chuckie at October 9, 2008 2:28 PM

I'm also a buyer at Esprit (an early purchaser), and while I have waited patiently for the building to be finished, frankly I did not expect it to open until this month or next. They have workers there 7 days a week now to make their own mid-month deadline. It's a great project, much nicer than any others I looked at, in an up and coming area of the city. It's a winner.

I want to add my surprise at the comments hinting at motives other than being gracious regarding deposit returns. They don't have to do it-- they're doing it because they're good guys. They want to create a real community, so they're going to weed out those who move because they have to or lose a lot of money, when they would prefer to adopt a fetal position until this all blows over. I don't see how returning deposits creates more purchasers. The developers could easily lose money with this offer because they may not be able easily to replace the drop outs with new buyers in this environment.

By the way, my understanding is that the offer covers everyone, regardless of when the purchase was made.

Posted by: Meredith at October 9, 2008 3:48 PM

Meredith and MissSunshine.. See you two at the cocktail party/meet and greet with the developer next week! Another nice thing the developer is doing. Buy me a drink and I'll forget that I might be overpaying in a declining market!

However, I will ask them why they picked that nasty green color on the south building in the south court. I'm partially color blind and I still think it's wrong. But the reflecting pool makes up for it I guess.


Posted by: Boo at October 9, 2008 4:12 PM

boo, of course I don't think all sales prices are exactly what the listing price is. But you and I both know there are plenty of unintelligent buyers out there who are paying full price. But then again, I think it's safe to say no one is getting a 20% discount on these, which is what I would require to buy here. Don't get me wrong, I like this place, but this area has a ways to go and these units are priced too high for the area. I can get better bang for my buck in a better area for these prices (or near it).

And boo, it's okay to be pissy about the market today. I am pretty happy as my biggest holding is an ultra-short ETF and it is up huge lately. :)

Posted by: dg at October 9, 2008 5:31 PM

Boo - I have to agree with you, its an odd color but I guess "fresh"... one of the reasons I picked the unit i did was so I didn't have to look at the green wall, but I have a view of the brick on the other side.

Entering the housing market now is yes, insane. And there is a lot to be said for the risk of financial loss and consequences. But if I have to live anywhere, at least it will be in an environment that I love. If I could hug a building, I would hug this one I am so happy to be living there. And to those who doubt the motives of the EP developers, point taken. But I am looking forward to living in the community of those who really wanted to be there. Cheers y'all.

Posted by: MissSunshine at October 9, 2008 5:33 PM

although a nice project, these condos were always destined for a major fall as they were priced 30% over neighborhood PSF numbers, and that is without taking into account the forthcoming bubble burst in SF.

In addition, it is located in an "up and coming area" that has been "up and coming" for 15yrs. the park next door is filled with homeless vagrants and dog poop. Cafe cocomo (the biggest speed club in the city) is practically next door and is extremely loud on the weekend nights and stays open till 4AM. THe area also gets littered with grafitti. I have a friend who lives at 701 minnesota and continually complained about the above.

i don't think the developer had any other option either. the project is way undersold and more than likely they are desperate for new deposits.

Posted by: spencer at October 9, 2008 7:23 PM

having just disagreed with spencer in another thread, I must note that he is spot-on here. 800++ per sp ft in dog patch is insane right now. I've been on the hard hat, and, except for the freeway noise, I might have considered one of the large, timber, top floor units back when the market was hot. but, now? seriously?

the patient are 12-18 months away from nice SFHs for the same money. stay away from SOMA and Potrero condos -- and really stay away from dogpatch unless you are look at $400/sp ft. I don't care how nice the finishes are and how many knobs there are on the stove.

Posted by: steve at October 9, 2008 11:18 PM

I seriously doubt everyone at Esprit is paying $800/sf here. Again, asking price is not selling price. But if they do that's good for me!

And here's Spencer on park patrol again. He sure takes good inventory of needles, poop, and vagrants for anyone who is interested in those stats. I imagine him walking through the parks of the city taking careful notes and going over every last inch sort of like those nuts with the metal detectors at the beach. 2 human feces, 3 needles, two vagrants, 6 empty beer bottles...

There is a lot of risk in terms of equity loss in the short term in just about every market right now. But it really comes down to whether you want to live here or not and for how long. I myself like a nice turd on my shoe while I walk a park and a vagrant to pass the time with so I'll be right at home.

Posted by: Boo at October 10, 2008 11:19 AM

I have been shopping for a while. The developer at this particular unit struck me as very thoughtful. I am in total agreement with viewLover. It is not fair to lump this developer in with the rest. I have been to ORH, 170 Townsend. Both are arrogant left me with the feeling that they were doing me a favor offering me the opportunity to buy into their units.

Posted by: Ex-InvBanker at October 10, 2008 8:18 PM

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