Commentary on the Recent VUE Charlotte Letter

Yesterday we printed the letter sent to many if not all the Vue Charlotte pre-sales buyers. There is much to talk about, so we may do it over a post or two. The first and most important reaction and feedback I have to all pre-sales buyers who are even remotely interested in salvaging their deposits and closing on their units is to take them up on their offer and call them to see what they will do! The blog has been pleading for some creativity and some negotiation and some compromise and this is exactly what this letter seems to represent. So it would be hypocritical and against everything we have preached if the advice was anything different but to call the VUE and see if they will give you a market price or something close to it.

Having said this, I want to make a few points. The pre-sales buyers are now more in the driver’s seat. Despite the language in the note, there is no threat of late charges or any other funds due so long as the court ruling remains where it currently is. The Vue Charlotte LOST the case in the first round and unless they win the appeal they have your deposit and that is their remedy. There is a low probability this will ever change so now you can call them holding more cards than you held previously. Obviously, they want to sell their units and you want to salvage your deposit. But you don’t want to buy something for a dollar that is worth 50 cents and they don’t want to sell you something where they lose 50 cents on the dollar. That is where the negotiation and a fair settlement on the price begins.

Unfortunately we do not know the true market price of these units. Their list prices should be for the most part disregarded because they are prices where no one is buying. I believe the units on the higher floors, the most expensive and larger units, are the most likely to be the nearest to market price. There are some units on lower floors that are worth maybe half as much as they were originally sold for. So there is quite a spread and it will take some doing to make sure both sides come out reasonably whole.

The next thing this note shows is that the Vue has some doubts about their appeal otherwise they wouldn’t be offering anything at all. These doubts are warranted. The court case ruling was fairly strong in favor of the buyers so to get it reversed is going to be very difficult. On the flip side, they clearly believe they have a case, which is why I think it will be difficult to extract significant price concessions from them. So long as they believe they can win and so long as they hold the view that their condos are worth a huge premium in Charlotte (despite the fact that no one is buying them) I feel like calling them might be likened to working with a hustling car dealer.

This could be an unfair statement though as I have heard decently positive feedback from folks that have closed on their units. So please let the blog know how your negotiations go so we can know what is being offered and whether we may see sales pick up. It’s all very nice that sales have exceeded 15 million dollars. Another way to look at it though, is the building has been open for approximately 9 months and it is 4% sold.

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