Buyers Assurance Program Guarantees Equity in Condo for First Three Years
- Apr 08, 2009
By Anuradha Kher, Online News EditorAtlanta–Cousins Properties has created the Cousins Assurance Program, which will assume most risks for qualified condominium buyers at its newest development called 10 Terminus (pictured).The 32-story luxury condominium tower that opened in Buckhead, Atlanta in the fall of 2008, sold 36 units in the pre-construction phase. As the economy starting slowing down and the housing market took a big heat, many defaulted on those contracts. Now, only 14 out of 142 units have been closed on. “As we were working through the question of why people weren’t buying condos, we realized that they were fearful of losing value, of deterioration in the market and of losing their job,” Tom Bell, CEO of Cousins, tells MHN. “So we wanted to eliminate these fears by offering this program.”The Cousins Assurance Program will provide financing for the purchase during the first three years of ownership. In addition, the program offers the following: It will guarantee the equity in a buyer’s condo for the first three years of ownership While banks require down payments of more than 20 percent on jumbo loans, Cousins will finance the condo with an initial five percent down payment While banks offer interest rates between 6 percent and 7 percent, Cousins will finance the condo for a 4 percent interest rate The program will offer homeowners the opportunity to move in immediately with 20 percent down and no payments for a year while they sell their current homes. According to Bell, simply discounting the product doesn’t help. “If you discount 15 percent, the buyer will wait for you to discount 30 percent. Some buyers are trying to time the bottom of the market and I don’t want to chase that ball downhill. We believe in the quality of 10 Terminus and have resisted lowering its market value.”The program has been offered only for the last eight days, and five contracts have been signed, while another five are underway. So how is Cousins Properties making this work? “The only risk we are undertaking is that property prices keep falling and we get the unit back at the end of three years, at which point we have to start marketing it all over again,” explains Bell.Condominiums at 10 Terminus Place start at $300,000 and go up to $3.5 million for the top-floor penthouse featuring a 4,000-square-foot rooftop deck. Average unit prices range between $600,000 and $800,000. The condo tower is one of three buildings rising at Terminus, the 10-acre mixed-use development Cousins launched in 2006.