Hello,
In response to the number of homeowners who have commented via "reply all" to one another I have created this blog as a voice for our common concerns. Please be aware that this is a public forum that anyone including agents, or the ownership group from Escala would be able to view.
In my opinion I think it is best that eventually the ownership group does have an opportunity to see what we collectively feel about the project given the changing market conditions. Everyone should be concerned, although what to do with that is up to us.
Personally as a homeowner I feel that concessions should be made to those buyers that elect to close given the current market conditions. If significant concessions aren't made I do foresee great difficutly for many buyers in obtaining financing and selling their current homes.
I have been told that units will start closing in October.
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I will not be closing on my unit at Escala. I have not informed Escala at this point. Even with price reductions, I still would not close. Changes in my personal life will restrict me from buying. I am interested in getting my earnest deposits back and will definitely hire an attorney. I've heard that Alex Thomason of Stanislaw Ashbaugh would be someone interested in pursuing a class action lawsuit. I would like to attend a buyer meet-up event to see what everyone else is doing. Maybe we can take a head count of who would like to hire an attorney.
ReplyDeleteEscala Condo Buyer
Although I have not spoke to an Attorney myself I have been told (by two independant sources that did speak to a lawyer in regards to their contact) that our buyers contracts were not rock solid and that there is room for refunds on the backend of the deal. Meaning if you fail to qualify you should get your deposit back, but you might have to fight a little to do so. However, I also spoke to my Agent who does a lot of condos in the city and he said that until they break their silence there is no need to go spend money on lawyers. I guess the project could still convert to apartments etc if they can't get them sold at a price they need. So they could undo all of our contracts no matter if we wanted to close or not. We will have to see what they do but the lack of infomation coming from them is alarming.
ReplyDeleteThanks for setting this up. We would like to close on our unit, but probably won't if we don't get some price concessions. It doesn't make sense to start out in a deeper hole than the value of the earnest money. Given that a large number of potential buyers seem to be of a similar mindset (i.e., backing out of the deal), it strikes me that it would make good business sense for Lexas/Escala to work with us. BTW, we are not the only development/city going through this nightmare. Check out this WSJ article (http://online.wsj.com/article/SB124683603903997941.html). It is amazing how similar their situation is to ours. Thanks.
ReplyDeleteThanks fo setting this up. I too, have had major changes in my life and then I lost my job last Jan. I have talked to the Escala and told thm that I will not be able to qualify or close. They will not refund my deposit and tell me that I am the only one that seems to be having this problem. I have talked to the same attorney, Alex, but am holding tight until we know more. Thanks.
ReplyDeleteTo be fair, Chris Stiebler has a job to do, that is to try and keep the buyers calm and in a good mindset as closing approaches. Midby and crew didn't get rid of the group they had in (the group I purchased with and liked very much) and bring in Chris because they though the priors were doing a great job.
ReplyDeleteNow that being said I take issue with anyone that I feel is dishonest with me and in light of the representations unwillingness to admint that there is in fact a problem with the market the buyers collectively are at odds with Escala.
As that is the case I will say very publicly I don't think there is any circumstance under which I will close. My unit is 1.4 + and without 40% price reduction the financing won't make any sense. My hope is to get a portion of my earnest money back and what I paid for upgrades. It is not an issue of liking or not liking the property, unfortunately the dishonesty of the representation makes me feel like I can't trust anything they are saying.
S
According to a couple of different buyers i spoken to, you can get your deposit back, but your upgrades may be another issue altogether. The issue of financing and a staggering shift in the valuation is something the builders are responsible for but I am told the contracts have several areas in which the buyer could disengage from the deal and retain their entire deposit. Hold the line on this as I have received responses from almost 30% of the buyers at Escala and if we stick together we will certainly receive better results.
ReplyDeleteDoes anyone know Robin Brower? Apparently she is a Windermere agent from Edmonds. I just got an email from her which was a compendium of many of the emails to date that expressed concern about the situation and the desire of the group to get together and discuss our approach. The only text was "and this..." Since my email was at the top of the list, I can only assume that she meant to forward the compendium rather than reply to me. I have emailed her back, asking the intent of her email. As Thomas noted at the beginning of the blog, I think it is safe to say that Windermere (and thus Escala) now know that these discussions are going on. That is probably a good thing, but it does suggest that we should talk soon.
ReplyDeleteYou are defintely correct that Escala is aware of our discussions, as well as this blog. Troy Howard is another agent that was included in all of the emails. He is an agent that works for Dean Jones of REAL Marketing. Anyways, it does NOT matter that they know of our discussions. If anything, I hope that everyone at Escala knows of our discussions. I'm sick of hearding Midby and company talk about how great the market is and how none of their Escala buyers have indicated they are backing out. Well, by my count, we have over a dozen buyers already that are concerned. I would love to have a meet-up of buyers. My vote is that we hire an attorney, but not until we get closer to the actual closing dates. I'm ready to meet up any time. Lets choose an evening to do this. I suggest Tuesday or Thursday evening.
ReplyDeleteI would prefer not to put my money into the Escala when it appears that 30% or less of the units have sold. What is to stop additional sales from being discounted dramatically just to get them off the developers hands? That would further erode the value of these condos in addition to the current market melt down. I agree that Midby needs to stop the "bravado" and be honest with us. I believe in the email stream that one of the potential buyers said he has a conference room across from the Escala where we could possibly have a buyers meeting.
ReplyDeleteHello,
ReplyDeleteI also agree that if prices are NOT dramatically dropped, I will not close. Why be upside down in realestate when you can buy a current condo on the market, reflecting current market condition prices? Look at the Cristalla Condos. The prices there are almost what they originally were back in 2004 - 2005 before the big increase.
Below is the title to an intersesting article about Realogics and the Escala: "Realogics Launching Brokerage." I cannot tag my posting with a weblink so just google the title and read the article.
This is why the Escala is trying to get everyone to switch banks!
Hey Escala, since your reading this blog, why not be upfront with us about everything?
I received a call from Chris yesterday. I was tied up and did not get a chance to speak to him but it seems that they are estimating October as the first closings.
ReplyDeleteI am going to schedule a trip to see the project first hand and get some information from the lions mouth so to say. I will keep you posted as to what I find.
I love this project and it just seems such bad luck to have it coming online in this terrible market. To be fair to the builers; they can't talk discount when the building is not even complete yet, it would undermine all of the financing in place for everything on the project including the construction. Obviously some type of concessions will be given when it becomes time to close or nobody will close. Lets keep each other informed as infomation, not rumors, will benefit us all.
I also received a call from Chris yesterday asking me to come by and look at our "future home."
ReplyDeleteI will listen to what they have to say, consult with my RE attorney (Imants Holmquist) and go from there.
As always, I still love the project, but will need to listen to the developers to determine what steps are taken not to protect just financing for us, but also protecting our value.
Every project that has been delivered in the last 8 months have screwed buyers that went through and closed at their contract price by turning around and auctioning off the other units, ultimately devaluing the units just purchased by the other buyers.
Our developers are good people, but everyone, especially in this market has their interests first. And I respond, SO WILL I.
-tom
Chris is an interesting character. He left me a message today saying that sales the past few months have increased exponentially. He reminds me of a used car salesman. He'll say anything for a sale. He also has been reading our emails because he said he wants to talk to me about financing, the economy, and the state of the real estate market. I've got a feeling he's trying to convince me to go forward with this million dollar purchase.
ReplyDeleteI also got a message. One of the things that is interesting is that the way that the sales people are compensated on these projects is alot of times they are advanced against their future commisions, so in this case I'm not sure, but it may be possible that without the commisions they would end up oweing money?
ReplyDeleteI was also told that Escala did 32 million in sales in either May or June when I inquired about concessions. I would like to see those types of facts substantiated as if they are false then Escala's reps are bull-shitting us.
Nobody is experiencing exponential sales growth. There were about 30 homes sold when I bought, by my count there are maybe double that now and I use the word "sold" loosely.
If you guys are seriously about having buyers close let's get serious and start talking about the concessions that are going to made to buyers and what assurances we will have against you auctioning off remaining units to satisfy debt while in the end screwing the buyers.
Can anyone explain Escala's practice of "releasing" floors over time? Is this common? I understand that they have sold 58% of the units that have been released.
ReplyDeleteAccording to the Seattle Times about a month or two ago the reported sales for the Escala were approximately 30%. Where did the 58% figure come from?
ReplyDeleteAccording to the Escala, "58% is the total precentage sales of the released units."
ReplyDeleteIs that "gibberish" or what?
Midby and his "entourage" see the Escala as 58% sold not 30% since ALL the floors are not released.
This is why they cannot see what we are saying to them.
I missed the group meeting last week, can anyone update me as to what the group of people who have attended, decided? I am considering hiring an attorney at this point as I see pulling out as my only option. Any discussion of Recission occur? Anyone know what our chances of getting any of our earnest money back is? Upgrades?
ReplyDeleteThanks,
There is a group organzing at the current time, if you send me an email to tkperiodds@gmail.com I will let you know what if any action is planned.
ReplyDeleteDid everyone else receive the revised POS? Can we rescind our contract due to this revision?
ReplyDeleteWe received the revised POS and are not planning to close. Is this the best avenue to keep in touch with what's happening?
ReplyDeleteIf you're not planing to close, then contact an attorney and fomrally rescind your offer. Time is critical! There is a short window to do this.
ReplyDelete"Chris is an interesting character. He left me a message today saying that sales the past few months have increased exponentially. He reminds me of a used car salesman. He'll say anything for a sale. "
ReplyDeleteSo priceless!! My thoughts exactly! All of these downtown condo agents are so full of shit!!!
Any updates on the rescission letters? Is there a 1 week time limitation?
ReplyDeleteHow many people got out of their contracts with the POS changes?
ReplyDeleteI signed and rescinded my contract but have not heard back from my attorney, yet. Has anyone else that did the same heard anything yet?
ReplyDeleteWith all of the condo auctions and discounts around town I'm not feeling very confident about Escala anymore. Did anyone see the WSJ article yesterday about the FDIC auctioning off $5b in loan securities this week, mostly condos?
ReplyDeleteIs there any sign of movement on price from Midby to stop pre-sales from walking?
After looking at the recent auctions and at least a 30% writeoff, we are considering walking on our deposit. I've heard nothing about closings but I'm not optimistic. My husband gets to say 'I told you so' since Escala was my choice :(
ReplyDeleteMidby has done little to convince us otherwise. Anyone else feel the same?
To Tom and All Preconstruction Buyers,
ReplyDeleteHave you or has anybody envolved been able to successfully resind your offer and get ernest money returned?
I did rescind with a few others. We are waiting to see what the next step is.
ReplyDeleteWe should get all our funds or close to it back.
We are considering Craig Blackmon as our attorney. He has been successful at other local condos and already has some Escala customers. I figure anything we can recover from our $100k is good and I'm sick of getting the brush off from Midby.
ReplyDeleteAny other attorney recommendations? I read that someone got all of their EM returned at Washington Square earlier this year but can't find the article now.
When the new POS was mailed to everyone you had 7 or 10 days to rescind. If you did not act during that window you accepted the new POS.
ReplyDeleteMany of us did rescind since we were working with attorneys at that time. I am not an attorney so I am not sure you have a viable reason to rescind now?
Steve Craine is also a good attorney to use.
I don't believe the "7-10 days to rescind" is valid in this situation. When you first sign the sales agreement, you also sign and date that you have received the POS. You then have 7 days to rescind. Escala sent the revised POS via Fed Ex and I did NOT sign for it. So when does the 7 days start counting? Unless I actually signed and dated that I received the revised POS, the 7 days should not be valid. Receiving a Fed Ex package does not constitute I am in agreement with the revised POS.
ReplyDeleteWith regards to an attorney...I know that Steven Crain is accepting clients. Last I checked, Craig Blackmon's office was NOT accepting clients. I asked why and they told me that they hadn't found the same legal loophole as they found in other projects like Washington Square and Olive 8.
Who knows...maybe Escala will follow suit with Vulcan and convert to apartments.
We rescinded in August and are staying in our current home. I'm grateful we aren't stuck with our earnest money like others who pre-bought at Olive 8. I heard that about 30 people at Escala did likewise, which means Escala presales must be under 20% now.
ReplyDeleteI can't see how Escala's developer could go into apartments and stay afloat. There is a glut of high end apartments in Seattle right now. Go over to the brand new Olivian or Aspira apartments and see how many they have rented. It's a ghost town over there (and Olivian has facilities which equal Escala). I heard that Vulcan is considering taking Enso apartments as well because of lack of closings.
I suspect we will see the bank step in soon and sell Escala at cents on the dollar, then we might see apartments or cheaper condo's.
wait....so some Escala buyers were actually able to rescind their contract and get their money back? I heard they were trying, but hadn't heard they had succeeded. Please confirm if this is true.
ReplyDeleteI am a presale buyer at Olive 8. I found this blog through another blog. Just to let you know that you need to be patient if you want your earnest money back. Most likly if sales continue as planned, the developer is not going to do anything until he goes through all the original buyers. See how many close at POS pricing. Olive 8 is is now 6 months after closings began and we still have not seen anying from the developer. I feel positive about seeing the return of some of our earnest money but I would not expect to see anyting until well after closings begin. I would be very surprised if Escala does not go to apartments of goes to auction. If you do want to purchase there just wait as prices will drop by more than the amount of your earnest money.
ReplyDeleteAny new news from anyone's attorney? Those of us that have legally rescinded within the correct time period are waiting to see what the results are for us.
ReplyDeleteWhat is the "correct time period"?
ReplyDeleteI thought you had 7 days to rescind the POS changes?
ReplyDeleteLooks like Vulcan's Enso project is pushing back closings to Xmas - just like Escala, they must be short of buyers.
Escala is probably now coming to a realization that they are not going to have lot of buyers. They've been asking buyers to schedule walk thrus. Buyers are now looking for attorneys. I believe there are over 20 buyers that have hired lawyers.
ReplyDeleteI haven't got a call about a walk thru yet. I did notice last night that there is now a concierge working in the lobby which must be pretty recent...
ReplyDeleteI have received a call to visit for a walk through. In talking with various lenders though I was told that because of paragraph 11.13 of the POS referring to the developer's option to manage a portion of the homes at Escala as TIMESHARES any loan obtained in this property needs to be a commercial loan. This changes the lending opportunities for me substantially. Has anyone else found a lending solution?
ReplyDeleteHow are lenders & legal counsel overlooking this? Seems we should make sure our legal teams are aware of the timeshare provision in the POS- I for one refuse to live in a timeshare environment.
ReplyDeleteTimeshare?! Are you kidding me? Is this a new change?
ReplyDeleteNo, it is not new. I checked the original POS and it also has the timeshare option. I imagine it is because Lexas is a Vegas company, and they have had previous projects in Vegas with timeshare options. In the end, its up to the buyer to carefully look over the POS, and this rule was always present. Just because lending changes now make it difficult to buy Escala, does not mean that you will get your deposit back. Now if this was a recent addition (which it is not), you'd have a decent argument.
ReplyDeleteI know I am willing to walk away from my deposit. I refuse to live there. I have mentlaly written off this financial loss, but this loss is small compared to actually closing on my current price.
ReplyDeleteMidby must deiced rather quickly what he plans to do with that building. It cannot go on as planned. There are few if any true buyers.
We might all still get out. IF you rescinded in time you can at least go to court and most likely win since Midby changed the POS.
With regards to rescission notice, the question is what constitutes acceptance of the revised POS? Does a signature with UPS indicate you accepted the revisions? If so, then why would Escala request you sign the POS revisions and return a copy to them? As long as you did not return either of the two POS revision notices, I think you are safe. I believe the 7-day notice applies AFTER you sign the revision notice, not after you sign the shipping form from UPS.
ReplyDeleteYes, but you needed to to submit an actual "Rescission" form to the Escala within that window of time.
ReplyDeleteSo what if you never signed the rescission notice and didn't send it back? Then the time period should never have started. So if you did not sign the form, you should still be able to fight for your money back from Escala.
ReplyDeleteI am not an attorney, but from what I know of this, a buyer can rescind within a (10 day period?, it might be slightly longer or shorter) after the seller changes a POS. If you do nothing and/or do not formally rescind within that time period, you are "By default" accepting the new POS and cannot use that as a reason to get out of the purchase.
ReplyDeleteSound slike you need ot be working with an attorney?
If you need one, there is Steve Crane. He is representing many buyers.
I see Enso closings are going ahead. I toured it recently and it's very nice. Sure, it doesn't have Club Cielo but I think style-wise it's more my tempo than the slightly Vegas feel of Escala which I never liked.
ReplyDeleteThe #1 reason however is the Enso prices are extremely attractive. When I first looked Escala was maybe 10% more expensive but now the gap has widened to 30% or more.
I have also looked at Olive 8. Prices have dropped!
ReplyDeleteIts very nice (Pedini cabinets too), and the Hyatt and the developer will be here for the long haul. I am considering it no matter what happens to my Escala deposit.
Olive 8 has closed only 24 homes - most of the presales dropped out. I'm concerned about buying in and then losing 30% at an auction like the other condos recently. The situation is basically identical to Escala.
ReplyDeleteThe Hyatt is technically a separate property from the condos so it doesn't help the developers financing.
Cabinets really don't matter much in the grand scheme of things.
Olive 8 has actually closed 53 homes.
ReplyDeleteThe Hotel "does matter", both to the Developer and the homeowners, and it is there to stay!
Actually, I think quality does matter in the real estate market.......
It is still less than 25% sold - just like Escala. I don't see how a hotel lease on a separate parcel helps Olive 8 meet their financing obligations on 200 unsold condos?
ReplyDeleteYes, quality matters but like the poster above I'm not basing my real estate decisions on cabinet finishes. There are hundreds of empty condos with nice cabinets.
On Escala - still waiting for the call to schedule a walkthru.
I heard from my attorney that there are no walk-throughs schedueled for buyers that have "Formally" rescinded thier agreements. Escala is willing to welcome you back "Into the fold" IF you are going to buy.
ReplyDeleteWe should see some "Decision" from Midby soon about what the plans will be for the Escala. How knows, maybe they will turn to apartments?
that explains why i haven't heard anything. just give me my money!
ReplyDeleteThe bank who financed Lexas/Escala in Oct 2006 (Fremont Investment and Loan) went bankrupt and sold off everything, including their real estate loan portfolio to CapitalSource. Presumably this includes Escala?
ReplyDeleteThe Q3 earnings for CapitalSource were a $237m loss, $220m of which was due to a doubling of commercial loan losses in their $6b 'legacy' commercial real estate portfolio.
If CapitalSource hold the keys to Escala's loan, which turned three years old during Q3, how long will it take them to mark down a condo investment as a loss?
http://voices.washingtonpost.com/washbizblog/2008/10/capitalsource_will_no_longer_b.html
i noticed some escala closings in november listed on the king county website. how did #1101 manage to get that price of under $600 a square foot?
ReplyDeletei'd like to know that too....
ReplyDeletedesperation
ReplyDeleteGeez, I had forgotten about this blog and haven't been on for awhile, you've all been busy. Regarding status. I did rescind within the appropriate period. Steve Crane, Imants Holmquist, Craig Blackmon? are all working together on this case. As you would imagine Lexas/Midby have some high priced talent on their side. I am sure they are not pushovers, we are just lowly homebuyers they are people that can get 300 million dollar construction loans!
ReplyDeleteIt'll take awhile. So far from what I understand (hardly concrete) only 7, yes 7 units have closed. All were cash purchases that did not require financing. When I spoke with Chris about seeing my unit he initially said yes, then when he found out I was part of the rescission group said no. then called back and said if I sign something saying I am willing to forfeit my earnest money deposit I can come in to talk about adjustments in price.
I thought that very interesting. In any case due to changes in the POS and this ownership groups position, difficulties in obtaining financing, I won't be closing. Let's see what happens next.
Sorry to hear that Thomas.
ReplyDeleteThere is an interview with Chris S on seattlecondoreview.com last week that said they are making 'modifications' to the home values as required.
I can't find an original price for #1101 but under $600 sq ft is at least 30% lower than what I recall.
They should just follow the Enso model and announce new pricing for everyone, rather than keeping us in the dark. It doesn't inspire confidence.
Out of curiosity I did a Google search on Chris and surprisingly found several articles regarding mortgage and appraisal fraud that reference a Chris Stiebler from Colorado. Interesting.
ReplyDeleteInteresting commentary on Escala
ReplyDeletehttp://www.seattlecondoreview.com/2009/12/escala-update.html
Here is a very interesting article about the Escala. It appears that we will ALL get our money back :-)
ReplyDeletehttp://www.stroupecondoblog.com/2010/01/something-everything-is-changing-at-escala/
What leads you to believe we ALL get our money back in this article?
ReplyDeleteIf this dramatic change is true (James Stroupe is a reliable realtor), then the POS will be changed AGAIN...but dramatically.
ReplyDeleteIf you're with an attorney NOW and already filing, this is perfect timing!
I believe I will get a good portion, if not all my funds.
The NEW sales team called me and confirmed all the changes. These changes should be completed within 3 weeks. One issue is refunding earnest monies to the people that rescinded thier contracts and possibly letting all parties out of thier contracts if they desire.
ReplyDeleteI'm thinking the new deals might be pretty interesting to look at if they come through on these promises. I'll definitely take another look.
ReplyDeleteI have no love lost for the old sales team. I think they bungled the whole project.
OUt with Chris Stiebler! Yeah! That was the biggest loser! He should stick with selling used cars.
ReplyDeleteNew pricing is out! 27% drop in prices! That is VERY IMPRESSIVE!
ReplyDeleteNot really, that is the market. Where did you find this information? I think it should be closer to 35% - 40% off quite frankly. They will still have a hard time finding buyers. Too much competition and too hard to qualify.
ReplyDeleteEscala...Too little, too late!
ReplyDeleteCall the sales center to verify. Prices have dropped! I actually may reconsider buying now that the prices are closer to current market conditions.
ReplyDeleteReally? They've dropped? I thought they were raising prices. Hahaha! They need to drop dramatically before they see significant sales. I have a unit reserved but unless I see 40% off, I am out. They should never have been so cocky, now it's going to bite them.
ReplyDeleteSo if your out, does that mean you will get your deposit back? Is there a choice of in or out with a refund?
ReplyDeleteI have been told they are offering earnest money back or new pricing. I have not personally spoken to them yet but that is my understanding. Due to the fact that the "club" is not going to be as advertised in everyone's original agreement, they have no choice but offer an out. Again, that is only my understanding and not the gospel but it makes sense. There are too many people hiring too many lawyers and finding loopholes to get their earnest money back. Not sure about the upgrade money quite yet but my guess is they would have to reimburse that back as well since things have changed from when we all originally bought in. So yes, they are dropping prices and that is a wonderful thing for those sitting around with the cash and/or financing and are comfortable with their future earnings. The problem for Escala (and many of the other developments) is they can't drop pricing fast enough because those mentioned above simply aren't there like they were two years ago, even with price reductions of 30% or more. In my opinion only, they need to hit the 40% or more mark in order to really start selling units. I guess time will tell...
ReplyDeleteI was called by the new sales team and my condo has dropped about 30% from the original contract price. My main concern is the Club Ceilo including the gym and all the common space is just going to sit there and the new HOA will have to figure out what to do with it.The new sales team is going to unload all these condos and you can only guess at the investment condos (renting their units out) and other bargain hunter riff-raff.
ReplyDeleteI have lived in many condos and getting HOA to agree to anything is VERY difficult. Example: 2200 Westlake HOA could not agree to have a 24 hr concierge. There was arguing, crying, and screaming, it was so bad I sold my condo. Its a mess there now!
The uncertainty of how the Club space will be used and all of those definite problems that will stem from that, very much concerns me!
I still might buy at Olive 8? At least there are many amenities (if I choose to use them) offered through the Hyatt hotel. Most importantly, at least I will know what I am buying.
Rumors?
ReplyDelete1. I heard the news sales team called one of us and said they had a buyer for their condo and the Escala was returning the earnest money.
Can anyone comment on this?
I've heard nothing but they have definitely sold my unit according to this photo
ReplyDeletehttp://mattgoyer.smugmug.com/Urbnlivn-Condos/Escala/11641657_2Bknk#820820351_CUXW2
Does anyone know if any of the original buyers got out of their contract because of Steve Crane?
ReplyDeleteI did! He was representing a large group of us. Most of us settled already.
ReplyDeleteThe Escala is returning ALL earnest money but no upgrade money.
In retrospect we all would have received our earnest money without any attorney costs, if we never used an attorney, but we all thought we had a battle on our hands with the Escala.
Steve Crane did a fine job! I would highly recommend him.
anyone decide to go back and buy at the new pricing? i'm considering it.
ReplyDeleteHello,
ReplyDeleteEscala seemingly looks interesting at the current price. Are there large number of people who are still unhappy with the Escala builders