B.O.G.O.

I thought I'd seen it all--and then I read this article yesterday. It's Buy One Get One free on steroids.

Just to synopsize, this developer in San Diego (who I've never heard of, by the way) is generously offering a $400,000 house for free with the purchase of a $1,600,000 home. Where do I start?

First and foremost, he's never going to sell those $1.6M houses anyway. And the $400,000 "row homes" will not be worth near that much in a few months, if they can even appraise for that already.

Secondly, why doesn't he just take $400,000 off the top of the expensive houses that he's desperately trying to unload? Well, it's probably because he's trying to rid himself of the expense of carrying the taxes, insurance, utilities, upkeep, etc. on the smaller homes. He also knows that the "luxury" houses won't sell for $1.2M, either--but it sounds so much better to get two houses than it does to have a 25% price cut. And, if he's already sold some at higher prices, he won't get as much grief from the current owners if the appraisals will still comp. A quick perusal of the web site tells me that this may be a motivating factor because it appears that five of the nine lots have been sold. When? Probably long ago and he's struggling by carrying the other four.

This builder seems to be spread thin. Hopefully, for the current homeowners, he won't be filing for bankruptcy any time soon.