Buying a New, Pre-Construction Condo: The Process
Shopping for a downtown St Paul or Minneapolis condo or loft with new construction? Consider pre-construction condominium projects. There are certainly some great opportunites for buyers looking for a brand new residence in the Twin Cities.
When purchasing new residential construction, however you might have to be patient. Since, there may be an unpredictable timeline for new construction. The advantage is early purchasers might get their pick of the available units.
The Buying Process
As you prepare for the following stages, note that the developer’s sales representative works for the builder. Therefore, you want to get an expert on your side to ask the hard questions and help you negotiate at every stage.
- Initial earnest money deposit. You’ll probably have to put several thousand dollars into escrow, which is fully refundable deposit until a specific date. In other words, the Purchase Agreement Contract will outline the dates, etc.. You can customize your new home by reserving your spot in the building, its floor plan, options and upgrades.
- State filings. The paperwork for a construction project includes; descriptions of the properties, materials, possible construction delay penalties, a homeowners’ association and its initial rules, and also a budget.
- Document review. It is important the buyers review all documents provided. A buyer consequently has a brief window of time to either commit, or opt for rescission. Note: the condo association fees may seem low initially; the budget may increase after you move in.
- Purchase agreement. For instance, you might have to prepare to put around 20% down, typically in stages of construction. It will depend on your current mortgage loan program and also the association requirements. Your go-ahead to move in document, called the Certificate of Occupancy, involves costs including (but not limited to) builder closing fees, association fees, the new home warranty fee, utility and occupancy fees.
Stay the Course
The construction timeline can stretch out unpredictably, testing the strongest of nerves. Consider the weather, the developer’s reliance on subcontractors, possible rescissions, and the permitting processes involved.
To learn about pre-construction condominium opportunities in the Twin Cities from experienced Minneapolis-St Paul Real Estate Agent, call us. With a combination of know-how and good planning on your side, you can avert deal-breaking snags, and get an opportunity to achieve your goal of obtaining a state-of-the-art living space in the Twin Cities.