I know of several of these small gated communities wherein the first couple sales go to friends and family of the developers, and the sale prices posted reflect the “normal” prices they’re listing for everything else. In at least a couple cases I’ve seen the realty agent who is going to farm that project buy the first house. Always at full retail, never a discount involved – at least not on paper.
Now some people might think that these homes are so great that even friends, family and business associates are chompng at the bit to pay full retail price to get them. However, I’m a professional cynic – being skeptical is part of my job description. I don’t see why a developer would sell a unit to their own family at the retail price – unless the real sale price is a lot lower than is recorded.
These developers know that most appraisers will rely on those first couple sales and give them the most weight in the appraisals of subsequent units. Enough so that they’ll go out of their way to find outside sales that match the inside sales even if they’re not as similar. It’s the path of least resistance. Otherwise, the appraisers have to explain why the first couple lowball sales AREN’T the most indicative of the value.
That’s why the first couple sales in a project are critical to the success of the project.
