Liquidate this

liquidation

The marketing firm behind the Onni’s “liquidation sale” has sent an email to local realtors praising their campaign as a success.  The message includes a link to a “pre-drafted email” for realtors to personalize and send to clients.

If the email is to be believed, Onni has sold 250 condos since the launch of its so-called liquidation.  Here’s an excerpt from the note, which started circulating a few days ago:

Everyone has been wondering if this liquidation sale is really offering good deals or if it is just a really great marketing effort. The fact is, Onni has sold over 250 homes in 18 days! This is good proof that the deals they are offering are real! I have also confirmed that all homes currently selling are offering at least 25% discounts.

The most recent update I received from the Sales Director of the Mac Bulk program, Cam Good, informed me that there are still upwards of 100 deals left for sale in Port Moody, Port Coquitlam, Richmond and New Westminster.

For the value-oriented buyer, the marketer’s standard of proof isn’t really proof at all.  So what if all units are at least 25 per cent off if we have no clue as to the prices the discounts are applied against.

Is it the peak pricing of 2008?  Last year’s projected pricing for 2009?  Or maybe it’s $1,000 a square foot.  You know,  because that’s an easy figure to work with.

But wait, didn’t Rennie say something about $2,010 in 2010?

23 Responses to “Liquidate this”

  1. MrBear Says:

    $2010 in 2010? That’s entirely believable. In metric.

  2. Carioca Canuck Says:

    I fully expect that every single condo offer to purchase will be at 25% off the current MLS list price from this day forward.

    Print out this e-mail and use it to lowball vendors……..after all, if 250 sales at 25% off isn’t convincing proof of the collapse……..what is eh ??

  3. greg Says:

    Carioca,

    I’ve been in “liquidation stores” too, don’t you mark things up like 100% and then offer them back at 50% off? 😉

    The telling comparison would be to take a unit where the presale buyer walked, and look at the discount relative to that presale price.

    This is the beauty and frustration of marketing, you can say almost anything, and nobody can show whether what you said was true or false. Nothing concrete to pin down.

    Going with that thesis, why not mark those condos up 75% (a bargain) from the presale price and then offer 50% off. 😉

    Also, how are 100 still for sale,with such a big discount? How is that possible?

    It will be interesting to watch whether these “discounted” properties cause a noticeable bump in sales activity for February. I’m guessing… NOT.

  4. jesse Says:

    If you’re going to buy one of these things, make sure you’re pre-approved or pay in cash. We all know Onni does when you can’t close. It rhymes with “raw fruit”.

  5. Boombust Says:

    I reminds me of “1984” when the telescreen announced that the chocolate ration had been “increased” when only the day before, it had been reduced.

  6. Carioca Canuck Says:

    Greg,

    My sarcasm did not translate well online. What you said was my point too.

  7. suz Says:

    Why don’t you go look at the prices before assuming they are no good? I went to check out their Port Moody development this weekend and their prices are lower than my friend had hers appraised for!! I don’t know why you bother writing about this when as you say, you have “no clue”

  8. show me the money Says:

    The blogger isn’t the only one with no clue — nobody knows the original prices:

    “What if they were 20 per cent above the market and now they’re just gotten down to where the market was? You just don’t know.” -Professor Tsur Somerville

    “I think people get really pulled in by the marketing claims of the 20 to 40 per cent, but then you really have to ask, 20 to 40 per cent off of what.” -Will Wertheim, AgentWill.com

  9. suz Says:

    The prices are there to see, they didn’t hide a thing from me the other day!! Really, its pretty easy to get the info – just phone them! Seems lazy to just say you have no clue when no one has even tried to find out…

  10. jesse Says:

    “heir prices are lower than my friend had hers appraised for!”

    There are lots of clues. I wonder when that appraisal was done — before or after the firesale? Now we are hearing some in this type of development can’t obtain financing. In wonder why.

    Actually there are TONS of places these days selling for below assessed value!! Can you believe it? Has the market become so irrational that the sky is purple and properties are now selling below appraised value? Next you’re going to tell me that sellers are going to ask buyers to assume their locked in mortgages at 4.5%!! Strange times indeed. Where are our heads.

  11. Panda Says:

    $2,010 in 2010? Rennie may be proven right yet. $2010 per square meter would require a rapid decline, but it is not entirely out of the question.

  12. Will Says:

    Actually… from what I gather, the Onni prices were really quite good. And why not? They need to mitigate the losses before suing those who backed out. If they had a 20% deposit and sell for 25% off it’s a much more manageable lawsuit (already launched on some). Additionally I was speaking with a TD broker who works across the street of the Port Moody site and she watched the whole sale go down including when one purchaser who had bought just recently was angrily witnessing his neighbouring unit sell for $150,000 less.

    Why are there still 100 units? Because a) not everyone wants to live in these locations (particularly farther out ones), b) not every suite is the best in building and it is not uncommon for the “dog suites” to remain empty for years in new developments during down markets, and c) most are convinced this market will go down further (having a liquidation sale only reinforces the doom and gloom, ironically) and these places are still out of reach financially for many people.

    But let’s point out something very important. Onni sold over 200 units in 18 days. How many homes did the entire 9500+ member REBGV sell in the same period? About 600? And Onni’s sales are not included in the REBGV numbers.

  13. markx Says:

    We’ll see whether the 250 sales stick. Maybe ONNI will be suing even more people?

  14. Tang Says:

    @ jesse. I think that suz means the appraisal value that was conducted by the bank for the purpose of the purchaser’s mortgage (not bc assessment).

  15. jesse Says:

    Tang, The difference between appraisal and assessment is inconsequential and were mixed up on purpose. Does an assessment performed in 2008 have any more validity then an appraisal from 2008?

    Perhaps those “subject to financing approval” clauses in offers should be included EVEN if you are “pre-approved” (meaning the bank still needs to appraise the property to lend out the $). With the way property prices have been known to drop in this town, being pre-approved should not be assumed.

  16. WestGeorgiaBoy Says:

    Simple Question, what will be the value of woodwards when in closes in a few months, ie how much per sq/ft average on better top floors?

  17. Skye Says:

    Don’t underestimate the level of kool-aid in this town, there’s still plenty of people that see a “bargain” and will go out and buy. Hardly anyone in Vancouver expect the “economic downturn” to affect us here, which is going to make the bloodbath in 2010 even worse.

  18. escada Says:

    I went to Onni’s surrey location, Escada to see if I could buy a condo. First few days they showed different condos saying all of them were 25% off. They quoted the price $289,900 less 25% for a condo I liked. When I went to sign the sale offer contract, they increased the price to 334,000 for the same condo. After a brief discussion they agreed to give me 35% off to bring the discounted price to what was quoted a day ago. The Onni sales rep prepared the sale contract and I signed it. After 2 days I was told the “vendor”, Onni has increased the price again. Now I was told to make a counter offer, $30,000 more than that was quoted, agreed and put on the original sale contract by their own rep. I pulled out of the sales offer and took my deposit cheque. I feel Onni /Mac whoever is running the show, is just too greedy and unethical.

  19. Happy Renter in North Van Says:

    Escada, I would never put the words “developper” and “ethical” in the same sentence… it’s like putting “Belzebub” and “heaven” together in the same sentence…

  20. jesse Says:

    @escada, I would be very surprised indeed if these guys DIDN’T pull all the old bait and switch, false bidder, confidence scams they were so used to pulling before. Do you think there was really another offer? No way.

    The only way you can win is not to play the game.

  21. markx Says:

    escada: I expected this as soon as I see a separate entity, “MAC marketing”, being used as the front end of this circus. I would never give deposit to an entity who does not directly own the property. Count yourself lucky that you got your deposit back. You can be spending the next decade chasing after a shell company for your deposit.

  22. Nero Says:

    Escada, consider yourself lucky that the stars aligned to push you off of your sale. Stick your deposit in something secure for the next 12 months then buy your condo at an additional 20% discount.

  23. Say No to Strata Says:

    Escada, you lucked out. Did you ever read that old Stockwatch post about the De Cotiis brothers where a whole bunch of people chime in to trash the quality of Onni construction? Definitely worth a few minutes of your time.

    First Harbour’s De Cotiis Brothers Involved in a Spat

    Panda, you do realize that there are 10.76 square feet in a square metre? Which would work out to, umm, 2,010 divided by 10.76 equals approximately 187 dollars per square foot. That’s getting down there. A while ago I would have said that Panda was just a bear, but now I’m thinking that $187/sq. ft. just might happen in a few years.

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