If you are thinking about buying a pre-construction home you are not alone. The amount of freedom you have in helping decide how your home will look, where it will be located, and the details of your contract are hard to pass up. But what should you know before purchasing one? Many people rent condos during the summer months in vacation locations such as Florida or the east coast, but wouldn’t it be nice to own one? Since the purchase of a home is not only a life decision but it’s also a huge financial obligation, you may want an attorney to look over your contract first to make sure everything looks in order before proceeding.
First, there are benefits and drawbacks to buying a pre-construction condo. While it can be exciting to know that you can have input as to the look and feel of a new condo or home, there are some things to keep in mind.
- It’s Hard to Tell What the Final Home Will Look Like When the Contractors are Finished: Some of this will depend on how well you have communicated your preferences to the builders. It may also be related to the types of materials that are being used to build your home.
- It May Take Longer than You Think: This also depends on how complicated your blueprint is, the company you hired to do it, and the wait time involved in gathering the materials.
- You Need to Read and Understand the Warranty Fully: There may be clauses in the agreement that do not guarantee every part of the home. Make sure you understand the contract before signing and ask questions.
The Advantages May Outweigh the Cons
The most significant advantage of buying a pre-construction home is that you have more freedom to get what you want, negotiate a price that you can afford, and be involved in the building process remotely by offering suggestions. You can also stay involved and work with the contractor by contacting regularly to chart the progress. If you communicate with the builders along the way (without being too overbearing), they are more likely meet your needs.
In addition to preparing for the sale of your home, you also often have plenty of time to save for your new build as the seller usually only requires that you pay a percentage of the down payment that leads up to the closing of the deal, which could be a year or two down the road. Keep in mind though, that some builders will require more up-front cash if you are customizing above and beyond the stock features.
Be aware of the fine print in your contract and do your best to research the building contractor. You often hear horror stories of poor service, and while delays seem to be common occurrences, as you do shop around, read reviews from many different sources to get the full picture. Then, as your home is being built, market values are increasing as well, already adding instant equity.