Home › Forums › Closed Forums › Buying and Selling RE › Mello Roos – Do builders remove it in a down market?
- This topic has 14 replies, 9 voices, and was last updated 17 years, 9 months ago by debshultz.
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January 2, 2007 at 8:59 AM #8138January 2, 2007 at 9:16 AM #42528PerryChaseParticipant
Even if developer could, why would they remove Mello Roos? Most buyers don’t look at the property tax liabilities until after they buy. Builders would simply lower selling price.
January 2, 2007 at 9:23 AM #42530no_such_realityParticipantI think Mello Roos actually go up in a down market.
Builders are less willing to finance the fluff and instead attempt to shove more stuff into the bonds the community carries.
January 2, 2007 at 5:45 PM #42559AnonymousGuestIt has gone down (certainly not gone) in at least one of Irvine’s Portola Springs communities, Decada.
SCHB
January 2, 2007 at 10:26 PM #42573BobbyDParticipantThx SCHB. I have also seen it be reduced in one development here in SD as well.
January 2, 2007 at 10:58 PM #42575sdcellarParticipantWhich development, BobbyD?
January 2, 2007 at 10:59 PM #42576Diego MamaniParticipantAren’t Mello Roos set by local governments? Cities, counties, etc., won’t approve new developments without the M-R to pay for new roads, utilities and schools. I don’t think the builders have a choice. Is there anybody here familiar with a County Assessor office and property taxes?
January 2, 2007 at 11:08 PM #42578sdcellarParticipantI was told that Mello-Roos can be paid off in one big chunk rather than paying it on an annual basis. If so, then it seems like a builder could certainly do it on behalf of potential buyers. Whether they would or not is another question. I’d also assume they could pay some portion of the assessment.
January 3, 2007 at 8:51 AM #42592BobbyDParticipantThere is a nice gated community in Escondido called “Ranches at Vistamonte” near the Wild Animal Park. Very nice new homes (3,700-4,500 sq ft) with large lots in the 800s. They used to be priced in the low millions ($1M – $1.2M). We used to live in the development next to it. It is a very nice area and very quiet. They have had a tough time selling the homes and in addition to lowering prices have also either lowered or removed the Mello Roos.
It is built by a smaller “boutique” builder called New Urban West that is based in Santa Monica. http://www.nuwi.com
So far that is the only one that I have seen that has lowered/removed the MR. I had the same understanding that MR can be paid in a chunk as well and therefore a builder could pay it as well as the buyer.
January 3, 2007 at 9:49 AM #42595debshultzParticipantdebs
New urban West is a very good builder and not at all surprising that they would do something like this. I’ve looked into them when I was considering a development called Belcaro up in Santa Clarita.
January 3, 2007 at 10:06 AM #42596outtamojoParticipantThis would seem like an excellent idea if the builder would agree to it- the builder would still get a “higher” selling price and the buyer wouldn’t get stuck with useless upgrades. I would love for builders to pay off my MR.
January 3, 2007 at 11:08 AM #42603BobbyDParticipantI moved to SD from Ohio in 98 and remember seeing then a lot of developments touting “No Mello Roos!”, so my assumption is that the builder can pay it off and use the lack of MR as a marketing incentive to sell homes.
I think that they pass those costs onto the buyer in an up market when they know they can get away with it and people will pay it. But the builder will absorb the costs in a down market when they know that they can not get away with it and it is a detraction for buyers.
I bet as the market gets worse for new homes, we may see builders reduce or remove mello roos. Hopefully . . .
January 8, 2007 at 12:35 PM #42952IONEGARMParticipantPardee Homes just dropped Mello-Roos at a development in Ventura (for new home purchasers not previous purchasers), I wrote about the change in my blog today.
http://rehq.blogspot.com/2007/01/pardee-homes-party-is-over.html
January 8, 2007 at 1:05 PM #42956BobbyDParticipantIONEGRAM,
That is very exciting news. Hopefully these knucklhead builders here in San Diego will catch on and do the same.
BD
January 8, 2007 at 1:36 PM #42960debshultzParticipantdebs
I suggest everyone do a cut and paste on the article and send to the folks at Del Sur:-)
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