Mandatory Memberships Hinder Sales?

Posted by Marc Rasmussen on Tuesday, July 2nd, 2013 at 4:42pm.

Is it easier to sell a home in a community where a club membership is not required? I believe so but let's see what the data indicates. In this post we compare sales between Laurel Oak Estates, which does not require membership, and The Oaks, which does. 

Sarasota is a popular destination for those who enjoy golf. The area has a variety of fabulous private and public courses to play on. Below are a few of our finest golf communities Lakewood Ranch Country Club

Fortunately, most of the golf communties in Sarasota and Bradenton do not have a mandatory membership. It can be quite a challenge to sell a home in a community that requires such a membership. The buyer pool of non-golfers or those who don't take the sport too seriously is much larger than the die-hard golfer who must belong to a club. The attitude of a home buyer can go from euphoria to nevermind pretty quickly when they learn about the added expense of a membership. 

The Oaks - Membership Required

The OaksThe Oaks an exclusive golf course community in Osprey, just south of Sarasota. This neighborhood really is a golf enthusiast's paradise. The Oaks Club is home to not one, but two championship golf courses; the Eagle Course and the Heron Course. 

This area was established nearly a century ago; the original Oaks property was the home of Chicago socialite Bertha Honore Palmer (think Chicago's Palmer House Hotel), a world-renowned art patron and businesswoman. 

Let's set the Realtor spin aside for a moment. The biggest complaints about The Oaks are the distance to downtown Sarasota and the mandatory club membership. 

Because of the beautiful community and homes in it, we do receive many inquiries about The Oaks. For many the membership requirement is a deal killer. Ulitmately, many buyers come to the conclusion that there are just too many other great communities out there where membership is not required. 

Equity Membership

  • $65,400 - $44,000 refundable equity fee, $21,000 non-refundable initiation fee less $1,000 transfer fee at termination
  • $1,877.25 - Quarterly Dues
  • $60.75 - Monthly Service Charge
  • $240 - Quarterly Capital Charge
  • $900 Annual Spending Minimum

Social Membership

  • $40,000 - Non-refundable initiation fee 
  • $1,385.50 - Quarterly Dues
  • $60.75 - Monthly Service Charge
  • $150 - Quarterly Capital Charge
  • $900 Annual Spending Minimum

The Oaks Clubside

This is the section east of U.S. 41 where the golf club is located. There are 358 estate sized home sites bordering the golf courses. Sales are more active in this section of the Oaks. 

The Oaks Clubside Sales from 1/1/2010 - 6/26/2013

  • 76 home sales
  • 46 expired/withdrawn homes (failed listings)
  • 22% turnover (76 sales/340 homes)

The Oaks Bayside

This is the section west of U.S. 41 where there are 197 home sites. Several of the home sites border Little Sarasota Bay which offer fabulous water views and tend to be the most expensive homes in The Oaks. Sales in this section historically have been much lower than other similar areas. 

The Oaks Bayside Sales from 1/1/2010 - 6/26/2013

  • 17 home sales
  • 24 expired/withdrawn homes (failed listings) - More failed listings than successful sales
  • 13% turnover (17 sales/131 homes)

Laurel Oak Estates - Membership Not Required

Laurel Oak EstatesOn the east side of I-75 and off Bee Ridge road you will find the highly sought after community of Laurel Oak Estates. It is comprised of maintenance-free homes in three minor subdivisions. Lot areas are large and spacious ranging from 2,200 to more than 7,500 square feet. Its five-star homes range from simple but elegant villas to the more exuberant palatial residences in the Laurel Oak Country Club estate. 

Laurel Oak Estate Sales from 1/1/2010 - 6/26/2013

Membership is not mandatory to purchase Laurel Oak estates. This makes it easier to sell a home. 

  • 149 home sales
  • 38 expired/withdrawn homes (failed listings)
  • 36% turnover (149 sales/409 homes)

Laurel Oak Estates vs The Oaks

Here we will compare sales of Laurel Oak Estates to The Oaks.

   The Oaks Bayside & Clubside (Membership Required  Laurel Oak Estates (Membership Not Required) 
Number of Homes    471  409
Homes Sales from 1/1/2010 - 6/26/2013   93  149
Number of Expired/Withdrawn Listings   70  38
Turnover 20%  36%
Average Days to Contract 281 199
Sales Price/List Price 90% 93%

Key Takeaways - Mandatory vs. Non Mandatory Memberships

  • Despite being a smaller community, 56 more homes sold in Laurel Oak Estates than The Oaks.
  • On average, homes sold in Laurel Oak Estates 82 days faster and at a smaller discount from asking price.
  • There were nearly twice as many failed (expired/withdrawn) listings in The Oaks versus Laurel Oak Estates.
  • Bottom line - It is much easier to sell a home in a community that does not require a golf membership versus one that does. 

Give us a call at 941.822.0708 if we can help you buy or sell a home in a golf course community

 

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2 Responses to "Mandatory Memberships Hinder Sales?"

Mike Justus wrote: This is an excellent article and it points out a situation that I encounter frequently. The disparity is also demonstrated within communities like Tara where home prices and sales are dramatically different between the membership and non-membership areas. Posted on Thursday, June 27th, 2013 at 8:16am.
Marc Rasmussen wrote: Thank you for the informative comment Mike. Many buyers just get turned off with mandatory Club memberships. Posted on Thursday, June 27th, 2013 at 8:27am.

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