I saw a commercial for this on TV last night and then received the flyer this morning. Pulte Homes is advertising a $99 move in special for this weekend only. [Click on the flyer to enlarge.] Accoring to the fine print: "Move-In for $99.00 offer consists of closing costs paid through participation in the Preferred Buyer Rewards Program, which includes financing through Pulte Mortgage LLC, and a down-payment gift funded by an approved non-profit organization."
The flyer also features a one-day-only special for Del Webb at Somersett this weekend where new Buyers get $20,000 cash back to use to cover closing costs, lower the purchase price, reduce interest rates, or add upgrades.
Phil
Arggg!
No skin in the game is one of the problems which made this bubble!
You would think we would learn…..
Marla
Does anybody know who the “approved non-profit organization” is that is making the “gift” of the down payment?
Is it the “Pulte Fund to Enable the American Dream and Maintain the American Economy” ?
Diane Cohn
Guy, you actually watch TV? That’s so 1990’s…
Guy Johnson
…basic network channels, no less.
DanF
Scary. Scary because, as Phil mentioned, this is how this whole mess started. Scary because it’s tempting (I’m just getting ready to graduate from UNR). But I don’t see how any reasonable person would jump into buying a house on that kind of schedule. Too used car dealership for me…
TroubledLoans
The other thing we don’t know is what the “underwriting and loan qualifications of the lender” are. Who knows, Pulte could be bringing back the NINJA loan in its own in-house loan co. One obviously does not need a down payment. Unless the $99 is considered a down payment. Does one need any assets? A job? A FICO above 500?
Enron accounting allows for many wonderous things. Like building up the sales numbers on the production side, and burying the crap paper deep in the bowels of the financing divison. Kind of like what GMAC used to do. In a billion dollar company, it will be years before the analysts comment on the slight of hand. Meanwhile, Pulte announces how sales are up, the slide is over, and happy days are here again.
BanteringBear
“The other thing we don’t know is what the “underwriting and loan qualifications of the lender” are. Who knows, Pulte could be bringing back the NINJA loan in its own in-house loan co. One obviously does not need a down payment. Unless the $99 is considered a down payment. Does one need any assets? A job? A FICO above 500?”
Can’t work. Without Moody’s AAA rating, and an endless supply of unwitting investors to pawn the junk to, the chain is broken. Try as they may, this ship is going down, BIGTIME. With the stern under water, the 750 footer is listing badly, and it’s 500 miles offshore with no lifeboats.
NAS
http://builder-implode.com/
This should connect you. If not, go to lenderimplode.com, then in the far right column find builder implode.
Read the articles and check out their stock. You decide where they are headed. Pulte is having sales nation wide, not just in Reno.
Phil
Has anyone else noticed the increase cost of builing supplies?
And what about holding costs of half finished streets?
Builders have to be hurting big time, there comes a time when they just walk away or try and do something like this just to move on.
And talking about walking away …. they already are! There are a group of homes (I think there are 7 of them) which are not complete on Equation Drive in Sparks which the builder walked away and the bank is now trying to sell incomplete homes. Actually an interesting opportunity.
This is just nuts and when you can move in for $99 dollars. My first home required at least 10% down, you where not even considered if you did not have that.
I am with BB this is going to get worse, and this add is showing how desparate builders are getting! I can only feel sorry for the resellers (like Dianne) who have to compete against junk like this.
Allen Murray
Phil, the cost of some building supplies such as concrete and steel have gone up, and many subs are now charging fuel surcharges, but this is offset by decreasing labor prices. There isn’t much demand for construction labor these days and there is plenty of supply. Instead of paying $75/hour contractor rates and hoping you can get somebody to show up, you can now get 5 contractors to show up for $40/hour. I can get concrete or lumber on a days notice when it used to take a week if we were lucky. Now is actually a great time to build a new home as long as it is for yourself and you’re not trying to flip it.
As for the homes on Equation, I think those are the same homes that a Wells Fargo construction lender called me on a while back. I am on their approved contractor list, and they are trying to sell them as completed homes and therefore need a contractor to finish them up before COE. So far, I believe one is in escrow.
chewgumm
Roughly, what percentage of asking price are homes selling for in:
* Damonte Ranch / D Diamond
* Gardneville / Minden
* Carson City
I have not been keeping up, so have no clue.
Thanks
Phil
Labor costs decreased by almost half? Ouch!
I did find it a bit strange to buy an incomplete home, seems there might be some building permit/insepction issues to work out. Then again the bank isn’t into building homes (yet). Equation homes being sold as-is or done by COE, it may be either depending on what the buyer wants and negotiates with the bank. I just heard someone interested in buying one at 211K and found it interesting.
Strange times!
Sam
Regarding the homes on Equation – the builder did not walk away. The land was foreclosed upon after many battles with the bank to finish those seven before the land got taken.
That builder is one builder in town that is still trying to make things work. He does it for the sake of the contractors that have been loyal to him over the past ten years, and for the reputation of the 12 subdivisions he has built, the four still in production and the three that he has coming up. He could have shut the doors like so many other builders and walked, but he’s been negotiating and selling and trying to make sure that everyone still has a job. He works for free. He makes good on the commitments that he made to the previous homebuyers who still need our customer service, and to the subcontractors, agents and title companies that work with us during these hard times.
Too many times you folks all blog a one sided story. There are always two sides. We live with the loss of those seven homes, and the other 100 or so that we lost due to the “game”. Have you seen the other 21 that were developed? Pretty nice house we build if you ask me, not the crap 2-month turnaround production home too many people live in.
Before you blog all your speculation, do some research. Your words have far more of an impact than you may think, and the only way for the market to turn around is for every side to be told. I’ve seen at least two other articles on this blog regarding the company I work for, that were so inaccurate I almost drove up the hill.
Peace.
SkrapGuy
The “game”? What was “the game” Sam?
Sam
Game equals Housing Market. Game equals life scrapguy. Sometimes you win, sometimes you lose.
SkrapGuy
I see Sam. So in 2004, when people were camping out for 3 days to be first in line to put down a deposit on a new house, and prices were going up every Monday morning, and everybody in the industry was a financial genius, and the future never looked better, the “game” was different. Yes, we just need to make sure that every side is told. I’m sure you would agree we need to tell the whole story.
Sam
Of course the game was different. Life is a game, in my opinion, and life changes day to day. If you camped out in ’04 and have all the choices in the world in ’08, that’s the market right? I mean in ’12 are we going camping again? I’ll make sure I have my tent! 🙂
I was just trying to clarify to a poster who stated that the builder “walked” on those homes, that they in fact tried very hard to save that property, but in the end they were unable to.
Reno is part of this strange market as is most of the country. If we can get all sides of the story, maybe those that read this blog for information might be a little more informed so that their decision is well-rounded and not one-sided. Banks, resellers, builders, indidviduals all see the market differently, but at the end of the day it’s just a house.
Peace.
billddrummer
Re the Equation Drive properties:
If you look at the document files for these homes, more than 100 liens were filed against the project in the days leading up to and following the foreclosure action. Some of them are from subs, some from the HOA on specific lots, some from the City of Sparks. Anyone who’s made an offer on any of these parcels and reviewed the prelims knows that closing one of these will depend on settling out all the existing liens. Which will increase your cost.
If that means cutting deals, then roll up your sleeves.
You might also consider getting an additional rider to the title policy insuring against construction defects on previously completed work. No telling how well construction held up during the winter, what with rain, snow, wind etc.
As far as I know, the bank isn’t interested in completing the homes.
I applaud anyone who’s interested in taking any of these lots over.
GreenNV
billddrummer, you are showing a good level of insight here lately. Willing to give up a little of your background?
Poor benevolent Sam’s company from over the hill got served on yet another project yesterday. Believe me, Q & D construction, who is owed over $13,000,000 by your defaulting entities, will knee-cap you before you hit Gold Ranch if you decide to come over to straighten us out. That said, I will happily amend any errors you find in the blogs on your company.
Sam
Green, I don’t work for Reynen & Bardis. My kneecaps are quite safe.
Thank you,
Sam
Sam
Oh, and Green my dear, “benevolent” is a good word for me personally, but I am not a decision maker. I’m just a gal who’s devoted my life to a homebuilding company for the past 8 years. I may not know it all, but I know MY company well.
There’s no need to “correct” anyone’s words on this blog, there are rumors and there are truths, and if I can contribute to the final truth, I will. Every employee of the company including my boss, is diligently working hard to keep our projects going. It’s business folks, whether you’re on the good side or the bad side of it. I, however, am a small grain of sand on a big old beach.
I just hope that I can be of service to anyone reading this blog for information. If it benefits my company, great, but mostly it’s to keep people talking and truthful knowledge progressing.
And regarding my kneecaps, I ain’t driving up the hill with these gas prices!! I’ll gladly keep my $0.02 on the net, it’s cheaper.
Peace.
Don Cooper
Business failures for developers are unfortunate. Predictable perhaps, but unfortunate.
I don’t see any reason to ascribe moral defeciencies to those who fail. All business is risky, and if there weren’t failures there probably wouldn’t be enough risk taking for the common good.
As for why developers didn’t see this coming: They probably did but just didn’t get the timing right. I remember Barton Biggs comments about the stock market bubble in 2000. He pointed out that the “fools were dancing” but that the “bigger fools were watching”, by which he meant that you could leave a lot of money on the table by not participating even if you knew things weren’t sustainable. It’s all a matter of timing.
Personally I don’t have the stomach for this type of risk but I’m glad there are those that do. I reserve my opprobrium for those who don’t have any skin in the game and just take risks with other people’s money.
billddrummer
To GreenNV,
Thanks for the kind words.
As far as my background, I’ve been in commercial banking in Reno for over 20 years, as a credit analyst, underwriter, account officer, documentation specialist and loan review officer, among other things. I’ve been able to learn a tremendous amount about the vagaries of residential and commercial real estate.
When I first discovered the Equation Drive action, I went to the Recorder website to check the notices filed against the property. That’s when I discovered the liens. (The website is Eagleweb, and it’s free to sign up.
http://www.co.washoe.nv.us/recorder/~color=blue&text_version=
You can get PDF formatted documents from mid-2005 to the present.)
The construction piece of my background came during a time when I was working for a bank in Carson City. A customer was interested in buying some bulk lots (foreclosed), and he needed additional title insurance to protect himself before he commenced vertical construction. Apparently, at the tail end of the project, some items weren’t completed properly. If he hadn’t had the additional insurance, he would have been liable for work he didn’t do! Fortunately, that project went well, and both the builder and the bank made a killing. But then, that was in 2002.
I happen to be a numbers guy with respect to relationships between different variables. Which is why I enjoy looking at stratification stats like the sold/listing data on this blog.
Hope that helps. I see blogs like this as a way for all of us to become better at what we do. I hope my contributions are a step in that direction.
billddrummer
An update on the Equation Drive homes:
According to Mitch Argon’s Homes Sold Report, all four of the partially completed properties sold in June for $215,000 each. Yet the Assessor hasn’t updated ownership information, and still shows Nevada State Bank as the owner of record for all the properties. I attempted to locate the transfer documents online, but didn’t find them.
Does anyone have any more details about the sale? Clearly, it’s a bulk sale, and there’s some value in the homes after they’re completed, but I’m wondering whether a developer picked up the finished lots as well.
Thanks.
GreenNV
The Equation properties sold 26 June 2008 to Peter A. Tomaino of Reno. Price for the 4 properties was $860,000 ($215,000 each). He put $200,000 down and financed $660,000. I haven’t been able to learn anything else about the buyer.
2 of the other partially completed houses have also been sold. 6697 Equation for $252,000, and 6747 for $197,500.
It looks like rest of the lots are still available. It is listed on Loopnet at $7,552,500 for 95 finished lots ($79,500 per lot).
billddrummer
To GreenNV,
Thanks for the update. Now, anybody interested in a bulk sale on 95 finished SF lots?