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Pre-Construction Condos: How the Process Works Pennsylvania

When you buy a home that's not built yet, there can be setbacks before you move in. Here are steps to buying a pre-construction condo

Local Companies

Eastern Savings Bank FSB
412- 788-1600
2000 Cliff Mine Rd (Park West Two Ste 400)
Pittsburgh, PA
Affordable Mortgage Advisors LLC
412- 561-3000
1910 Cochran RD Manor Oak 2
Pittsburgh, PA
Century 21 Select Group (Brian Mccardle)
(570) 643-4823
Rt. 115, Po Box 200
Blakeslee, PA
Kerry Clean
(570) 722-0885
Po Box 1527
Albrightsville, PA
Pennsylvania State Employees Credit Union
(610) 865-2400
1 Credit Union Place
Harrisburg, PA
Anthony Schimmel, Associate Broker/Owner - Keller Williams Real Estate
(610) 395-9123
2901 Emerick Boulevard, Suite 100
Bethlehem, PA
Long & Foster Real Estate - Mary Lynn Bonsall
(877) 247-8080
3101 Emrick Boulevard
Bethlehem, PA
The Wagner Group - Keller Williams Real Estate
(212) 380-7448
2901 Emerick Boulevard, Suite 100
Bethlehem, PA
Grace Realty Co, Inc.
(610) 837-4131
LVIP IV, Suite B
Bethlehem, PA
Re/Max Classic Group - Alice Marques, Realtor
(610) 262-4566
2416 Emrick Boulevard
Bethlehem, PA

 

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Pre-construction condos are units that have been proposed by a developer, but have not yet been built. When you purchase a pre-construction unit, you are putting money down before construction begins.

Buying a pre-construction condominium can be a great opportunity, but you should proceed with caution. Because you are buying into something that does not yet exist, there is greater potential for unforeseen problems and setbacks before you move into your home. By understanding the risks and planning carefully, you can avoid complications and come out a winner.



Advantages

The main advantage to buying into a condominium development before construction starts is that you often get a lower price than if you buy when construction is complete. The reason for this is that developers typically need pre-construction sales of 50 percent to 90 percent of the units in a development before they can borrow funds to begin construction.

Pre-construction condos can also get you in on the ground floor of an investment that will appreciate. The market value of pre-construction units generally increases during the one to three years it takes to build a development, so your unit may be worth more than you’ve paid for it before you set foot in the place. In addition, you can often choose from a variety of finishes and flooring options, allowing you to customize your home.



How the process works

There are several steps to buying a pre-construction condo. They can vary from developer to developer, but the basic components are:

1. Reservation agreement
You give a deposit (usually between $5,000 and $10,000) to reserve the unit and set the price (although the builder can reserve the right to change the price in the contract). The deposit is held in escrow and you can cancel the agreement at any time with a full refund.

2. Condominium documents
When a development is approved for construction, the developer submits condominium documents (including budgets, association rules, unit descriptions, materials and other important information) for approval by the state. Once the documents are approved, they are sent to you for review. Read them carefully to make sure that you will be comfortable living by the association rules.

3. Right of rescission
Once you receive the condominium documents, you have a 15-day period to decide whether you would like to proceed into a binding contract. If you don’t, you can exercise your right of rescission and withdraw with a full refund.

4. Hard contract
If you don’t withdraw, you’ll provide the balance of the required down payment, usually 15 to 20 percent of the purchase price, and sign a binding contract agreeing to purchase the condominium. You generally have seven days after that to cancel. This is your last chance to walk away with no penalty.

5. Closing
When construction is nearly finished, the developer will issue you a Certificate of Occupancy. A closing date is set when you will hand over the balance of the purchase price and sign the final documents. If all goes according to plan, your closing will coincide with your move-in date, and you will be ready to enjoy your new home.

Published on July 17, 2007

Read full article at realestate.com

Featured Local Company

Eastern Savings Bank FSB

412- 788-1600
2000 Cliff Mine Rd (Park West Two Ste 400)
Pittsburgh, PA
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