As Vantage Pointe’s clock ticked down on its big deadlines this weekend, the developers of downtown’s biggest condo building delivered this shocker to the inboxes of the nearly 300 buyers late this afternoon:
The buyers are getting their money back.
In an e-mail, Brian Stoddard, president and chief operating officer at Pointe of View, informed the buyers that they would soon receive formal cancellations of their contracts and that their deposits will be returned.
That means if the developers hadn’t finished those units by the deadlines, they could’ve been forced to refund those buyers’ deposits. But the refund announced today includes all of the buyers, even those whose deadlines weren’t until later this year or next year.
The refund comes as good news for many buyers who’d been anxiously eyeing their closing dates and reconsidering their decisions in 2004 and 2005 to purchase units in the building. In recent weeks, the face-off between the developers and the buyers — many of whom hoped for discounts and other assurances from the builder — was getting increasingly ugly. Some said that disintegrating relationship had more to do with their reticence to go through with their purchase than the declining real estate market.
The buyers put down a 5 percent deposit when they committed to buying condos in the still under-construction project. For many of the buyers, those deposits are in the range of $15,000 to $25,000.
As reasons for the refund, Stoddard cited the “current economic environment” and the requirements imposed by Fannie Mae before the giant mortgage company would back mortgages for buyers in the building.
Those requirements include splitting the project up into three phases, and so the developers will be amending their plans with the state Department of Real Estate. Those amendments constitute a change to the project, a trigger for the contract to be voided.
Stoddard promised incentives to the buyers who would re-purchase their units when they’re re-released. From the e-mail:
When Vantage Pointe opens to the public with new pricing and buyers are able to view the model residences and the project amenities, we are confident that there will be sufficient buyer interest in Vantage Pointe for us to meet the Fannie Mae pre-sale requirements within a reasonable period of time.
Your sales representatives will be contacting you to discuss re-purchasing a residence in Vantage Pointe. …
We apologize for this inconvenience, but the current economic environment necessitates the restructuring of Vantage Pointe to ensure its success.
Brad Willis has served as a de facto spokesman for the committed buyers on the project because of the online message board he moderated about the project.
He was relieved to hear about the refund.
“In any event, that’s good news,” he said. “I’m glad that they’re refunding the deposits — now they can start from scratch.”
Willis said he would still consider buying a unit in the restructured building, depending on how it was offered.
“You’d have to be a fool not to look at what they offer in terms of incentives,” he said. “Some people may well consider moving forward.”
I caught Randy Klapstein, Pointe of View CEO, on the phone just now. He said the process should take three to four weeks to restructure the building and release it for sale.
“Three to four weeks from now we’ll hopefully have many of our buyers back,” Klapstein said. “Hopefully it’s positive and people will realize the value of the project.”
Willis said the quality of communication from the developer has been very poor for the last few months. He said he hoped the restructured project would spark some better communication between the developers and whoever decides to buy a condo there.
“Hopefully they see, it’s not just the fault of the real estate market,” he said. “Hopefully now they can make some adjustments.”
For a recap of all of our coverage of this project, check out this compendium.