Wednesday, September 17, 2008

Pacific Lifestyle Promises to Buy Your Used Home

Pacific Lifestyle Homes is using an interesting new sales promotion. I see the upside for the home builder and understand why they are using it but I also see a potential downside for less savvy home buyers.

You can read the full text of promotion below or on their website.

The upside is the fact that many sellers are unable to sell their current homes and the promotion appears to remove that objection during the sales process.

We know homes that are priced competitively are selling in this market, sometimes with multiple offers. The major issue holding the market up is sellers’ expectations. Home owners still feel their homes are not falling in value.

Here is an excerpt from an article in the San Francisco Business Journal: said that a majority of homeowners believe their house is insulated from the housing crisis, which has seen 77 percent of the nation's homes fall in value during the second quarter.
The online real estate company's second quarter homeowner confidence survey found that 62 percent of homeowners believe their house has actually increased in value despite the nation's widely reported housing woes and significant market data to the contrary.
And they're even more optimistic looking ahead as they anticipate their house will be worth even more in six months. But many homeowners are concerned that foreclosures in their area could hurt home values over the next year.

If most people think their homes value isn't dropping then how does Pacific Lifestyle address this gap between realistic selling price and what the seller thinks their home is worth?

I have several questions regarding this promotion:

How does Pacific Lifestyle determine the value of the existing home?

Do both parties agree on the value of the existing home prior to signing paperwork for the new home or is the value determined after everything is signed and any right of rescission has elapsed?

How does Pacific Lifestyle disclose this process to the potential buyer?

I don’t want to assume the worst but I have emailed them (via their online information request form) and called about two weeks ago with no response. It is really frustrating to get the cold shoulder when you are trying to fact check…