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Real Estate Market adds complexity for consumers – Economy to suffer

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By : Rudson Tren    99 or more times read
Bad News! Consumers are now slapped with a new level of complexity by the home developers. The consumers are now put under obligations by some of the home developers to pay a fee to them when reselling their properties.

Something called “FLIP TAX” was already there and many of the dwellers in townhouses and condos were already familiar with this tax. Formally, this flip tax in know as resale fee. The condo community or associations charge this fee as a percentage on the resale value. The fee is collected from the owner selling the condo and is used for maintenance or is added to the condo reserves, which are later used by the condo association for benefiting the residents.

However, in some of the latest home developments, the developers have become more aggressive about the fee and they are actually including 1% of the resale amount as the fee, which they are going to collect every time a house is sold. The weird thing is that this fee, which is now collected by some of the developers, is not for reuse and maintenance, but will actually go in the pockets of the developers.

Economists say that this is not going to benefit the consumers and they opine that every dollar that the consumers pay extra to the housing developers is the dollar which is lost from other spending and this is not at all a good sign for the economy, which will be suffering because of this.

The news has already reached Washington and there is a charge filed against this fee. The problem is that the consumers are already troubled due to several economic factors and they are already in distressed condition. The recession and foreclosures are forcing them for distressed selling and, sometimes, the houses are repossessed by the lenders. This is definitely heading for a darker alley.

As distressed selling and foreclosures are adding up to the inventories of the banks, the lenders are actually forced to sell their repossessed stocks at low prices and the prospective homebuyers are going after preoccupied properties instead of new homes. This explains why the developers are aggressive about earning more by charging consumers when the owners resale the properties.

Nonetheless, the would-be homeowners are benefiting from any economic crisis come up. They are getting once highly priced properties at rock bottom prices and are managing to get some good amounts of savings.
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