Where buyer demand is high, some builders are holding lotteries to determine who gets to purchase homes in their developments.
For example, O’Brien Homes has been holding monthly housing lotteries in Sunnyvale, Calif., for its development Fusion, a 228-unit development. The builder decided to start having lotteries after potential buyers had camped out for the openings of other new condos in the area.
Each month, O’Brien Homes has attracted around 50 eager, pre-qualified buyers—who already have their down payments secured—to enter the lottery. Only about 10 or so sites are available to lottery participants each month. Participating buyers are given a bingo ball and then must wait for the builder to pick a ball from the tumbler to see if they have a chance at purchasing a home. O’Brien has begun to give returning buyers and extra bingo ball to better their chances of winning.
For some buyers, the lottery system has proven frustrating, as they return month after month trying to snag a chance for one of the homes, says Susie Frimel, a spokeswoman for O’Brien Homes. Also, the prices are rising practically every time. Two-, three-, and four-bedroom homes ranged from $420,000 to $620,000 when the lotteries first began, but now have posted a 32 percent increase, ranging from $555,000 to $815,000.
Other builders are reportedly trying the lottery system too, such as Shea Homes in Livermore, Calif., GL Homes in Florida, and Camberley Homes in northern Virginia.
“[O]ur homes are at a price that we are willing to accept and not force customers to potentially get into a bidding war,” said Marcie DePlaza, GL Homes division president, explaining to CNNMoney the company’s decision to hold a lottery recently to sell off 11 of its model homes in Delray Beach, Fla. “So for us, the lottery is the fairest way to determine the priority in which customers will be able to purchase our model homes.”
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2013/04/30/buyers-try-their-luck-housing-lotteries
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