Buying in Bulk

The success of the Costco chain of stores has proven that buying in bulk makes sense to a lot of us. From retail sales to real estate, the bulk purchase concept is logically sound.

Builders who negotiate a purchase of all or a portion of a subdivision may find that the bulk sale is beneficial, allowing for a better purchase price, among other things. We see these types of transactions more and more as residential development evolves to a separation of development from home building.

Builders who buy super-pads or finished lots can file for a public report before the acquisition has been completed, adding another layer of efficiency to this type of buying. There are a few things to address in the documentation in order to get the best results:

  • incremental take-downs work, but the take-down schedule must include an outside date (calendar date) for the last take- down.
    • Documents that don’t include an outside calendar date will result in deficiencies and delays at DRE.
  • The outside date will allow the DRE to pinpoint an expiration date for the public report
  • Having the outside date be conservative and at least one year out will allow you to obtain a full-term preliminary (pink) and/or conditional (yellow) report
  • At least one lot must be acquired in order to obtain a final (white) public report, called a “Limited Term” Public Report. This report will expire 30 days after the outside date, and can be converted to a full-term report with no additional DRE fees
  • The take-down schedule should be tied to the marketing phasing schedule to avoid delays or complications in HOA budgeting.

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Effective July 1, DRE Has Increased Their Filing Fees

The California Department of Real Estate (DRE) is implementing new regulations that impact buyers and sellers. These new regulations will implement higher fees, revised mapping regulations, and new building configurations. Real estate professionals and stakeholders—particularly developers—must familiarize themselves with these updates to navigate the evolving regulatory framework and continue providing high-quality services. We’ve created a blog post with helpful information on the updated filing fees and a full analysis of the changes.

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