(OREO.com)I started my real estate career working for a marketing company that represented many reputable builders of new homes and hi-rise condominium projects. Initially I was representing builders. Since then, as a REALTOR®, I have also helped home buyers purchase pre-construction units. My exposure to both sides of the transaction leads me to believe there is room for greater transparency and due diligence to serve our buyers better.
In a resale transaction, we are trained to do our due diligence as buyer representatives. We strive to protect our buyer’s best interests by obtaining a home inspection, land registry search, insurance claim history and so on. However, the sales process is very different when the actual product is not yet built. The old saying comes to mind: “If you can't touch it, don't buy it,” yet pre-construction prices may save buyers thousands of dollars or get them the best choice of suites or lots in a sub-division. With that in mind, here are some issues to watch for.
Closing Dates and Occupancy Dates: As industry professionals, we know that new home and condo projects are often delayed, yet consumers aren’t always aware of this. Ask the developer about potential delays in closing dates and manage your buyers’ expectations accordingly to save a lot of anguish. You can also ask about pending approvals to understand what hurdles lie ahead for this project. In my experience, high-rise condominium projects are more likely to face delays than low rise projects.
"The more approvals the builder has received, the less likely that drastic changes will confront your buyer.”