How Condo Hotels Are Sold
Most condo hotels are initially sold pre-construction and through a reservation process. A reservation generally consists of signing an agreement stating that you have an interest in learning more about the opportunity. A reservation secures you the opportunity to attend a sales event and make a purchase if you choose to do so.
Most reservations require a fully refundable $5,000 deposit. By and large, you cannot attend the sales event if you do not have a reservation. If you choose to make a purchase at the sales event, you generally put down a 10% deposit to secure the property.
A majority of the 4 and 5 star condo hotels sell out in the pre-construction phase. Typically, branded condo hotels sell out the first day that they are made available for purchase. Some of the most recent examples of one-day sellouts are Trump Waikiki and the Hard Rock Hotel San Diego. Trump Waikiki sold over $700 million in real estate in the first 9 hours they were made available. Hard Rock Hotel San Diego sold over $300 million in the first 12 hours that they were made available. Needless to say, many persons were not able to purchase. Only those who put in reservations at the early stage of the development had the opportunity to make a purchase.
A common question is whether you can double escrow a condo hotel. Some developers will allow this, but most do not. In fact, most developers have it expressly written in the contract that if you open escrow on a property you must wait until you close before you will have the opportunity to put it on the market.
Once escrow has closed and an owner wishes to resell their property, they have all of the options available to them that they would if they were selling traditional real estate. They can either try to sell it themselves or use an agent who works for Coldwell Banker, Century 21, or anyone else for that matter. But, there’s an even better option.
As is often the case with higher end branded condo hotels, most will have a sales office in the hotel lobby or onsite to assist owners in reselling their property. This is almost always the smartest way to go about reselling a condo hotel and it’s wise to take advantage of this resource. The thousands and thousands of hotels guests staying at the hotel on a monthly basis are all prospective buyers and they’ll walk right by the sales office each visit. You couldn’t ask for a more targeted amount of high volume foot traffic.
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