Take a good look around the internet – you’ll find hundreds of adverts offering stunning developer direct deals, not just from developers but all manner of makeshift websites.

Unfortunately, no - a discount of 50% on a price originally inflated by 50% doesn’t make for a 50% discount on today’s price.

It’s all about comparing like for like in the market.

If a development never sold well, it was likely for a reason: it was poorly located, of low quality build quality or with poor facilities, access or presentation. In our opinion its bargain price of today does NOT constitute a bargain and the original reasons for poor sales will remain.

Why buy a developers problem, where he will still have another 99 similar problems to resolve?

But don’t despair just yet - there ARE good developer bargains out there, just not those outlined above.

Real developer bargains exist in the form of ‘occasional releases’ or in reasonable discounts or something of both. Developers of quality projects in great locations have been caught like everyone else by the credit crunch and may be struggling, but they don’t necessarily need to fall to their knees and plead for buyers. 

Good projects are well supported by banks which, for their own reasons, have refinanced or perhaps given a moratorium on payments on projects they see holding sound future value. A bargain buy is therefore most often had not from a desperate developer but a smart developer.

If a developer is waiting for the upside and for value on their project, the opportunity may exist to tag along for the same ride. How? Well, no matter how good a project is, how many units sold and the development ticking over, there are always cashflow requirements, which is where the occasional genuine special release price or reasonable discounting occurs.

Dumped stock is usually toxic waste. Stock being carefully released in stages has been recognised as having future value and is being released as a necessity in order to profit at a later stage.

If, for example, La Cala resort offers a discount of 20%, it is far more likely a genuine good buy than a 50% reduction on a ragtag project in the back of beyond. La Cala has a 20 year pedigree of exceptional quality which is here to stay. 

When Alanda Homes periodically advise us of a single unit for sale at little or no profit to them, this is likely an accounts decision and hence a great buy, as in the future their quality development will sell, prices will rise and you will have great resale potential. They needed your funds to get through the tough times and you reap their future rewards.

There ARE some terrific buys out there, some bargains the like of which we have not seen for many years. But do please read our “Perfect Mix” article, as even a genuine bargain isn’t necessarily something you should buy.

If you would like to know more or hear from us
further please email us at info at yourviva dot com

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