Quote:
Originally Posted by wacko
From the Regina Construction thread:
I am actually a bit surprised at this. I'd been under the impression that local builders weren't in the habit of building on speculation (unlike many U.S. home builders at the peak of the American real estate bubble in 2005).
Supposing I didn't want a new car though? Could I just ask for a straightforward discount on the home price?
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Ha! Not really. Usually those deals amount to a prepaid lease for three years, so maybe you could get that value in exchange?
Most homebuilders are buying lots and building on spec. That's why inventories are so high. In a multi-unit project, they'll hit their pre-sale targets - say, 50% - and build the rest on spec. Reason there is that the bank won't finance. But in the single-family world where the lot is purchased and the house built, often the creditors for the big generals end up being the subs. If the house sells before it's complete, fantastic. If not, subs can end up carrying long receivables until they threaten to lien the property. They've got all kinds of tricks up their sleeves these days to keep that 45 day lien period going...