How condo hotels are sold
Most condominiums are sold prior to construction and through a reservation process. A reservation usually consists of signing an agreement that you have an interest in learning more about the opportunity. A reservation ensures you the opportunity to attend a sales event and make a purchase if you choose to do so.
Most reservations require a fully refundable deposit of $5,000. In general, 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 typically put down a 10% deposit to secure the property.
Almost all 4 and 5 star condominiums are sold in the pre-construction phase. Brand-name condos typically sell out the first day they’re available for purchase. Some of the most recent examples of sold-out tickets in one day are Trump Waikiki and Hard Rock Hotel San Diego. Trump Waikiki sold more than $700 million worth of real estate in the first 9 hours it became available. Hard Rock San Diego sold over $300 million in the first 6 hours it was available. Needless to say, many people were unable to buy. Only those who made reservations at the early stage of development had the opportunity to make a purchase.
A common question is whether you can double the security deposit on a condo hotel. Some developers will allow it, but most won’t. In fact, most developers have expressly written in the contract that if you open escrow on a property, you must wait until it closes before you have a chance to put it on the market.
Once escrow has been closed and a homeowner wishes to resell their property, they have all the options available to them that they would have if they were selling traditional real estate. They can try to sell it themselves or use an agent who works for Coldwell Banker or Century 21. But there’s an even better option.
As is often the case with high-end brand name condo hotels, most will have a sales office in the hotel lobby or on-site to help owners resell their property. This is almost always the smartest way to resell a condominium hotel and it is advisable to take advantage of this resource. The thousands upon thousands of hotel guests who stay at the hotel monthly are all potential buyers and will walk right past the sales office on every visit. I couldn’t ask for a more specific amount of high volume foot traffic.