New Developments Frequently Asked Questions

Answer: A new development condo is a condominium that is sold by a developer before the building is completed. Buyers purchase the unit based on architectural plans and renderings, and construction is typically ongoing at the time of purchase.

Answer: New development Condominiums offer a great opportunity to purchase at a discounted amount from current market prices

1. Historically speaking, during the new development phase the demand for new development projects is not as high compared to when they are completed and ready for occupancy. Once completed, people have a unit to feel and experience, which drives the demand upward. If you can visualize yourself in the unit during the new development phase and end up purchasing the unit, you get to reap the benefits in the form of gained equity.
2. Expenses associated with owning a condo such as HOA fees, Home Insurance, property taxes, and utilies, are not paid until the unit is complete and moved in to. You get to own a unit and build equity, without having to pay these expenses.
3. Buying new development allows you to be the first owner, ability to customize finishes, and reap the benefits of buying a new construction product.
4. Investing in a new development condo can be a lucrative choice for those looking to generate rental income. Newer buildings with modern amenities and in desirable locations tend to attract higher-paying tenants. Additionally, since the property is brand new, it may require less maintenance and fewer repairs, making it easier to manage as a rental property and maximizing the return on investment.

Answer: HOA fees for new construction condos typically start at around .80/square foot per month. However, depending on the level of luxury, service, and amenities, the HOA fees could fluctuate or be higher.

Answer: A developer must hold 10% of the buyer’s purchase price in escrow for the entirety of the project by law.

Answer: The completion time can vary, but it generally takes anywhere from 1 to 4 years from the time of purchase, depending on the size and scope of the project.

Answer: Payments are usually made in installments. A common structure might include an initial deposit (e.g., 5-20% of the purchase price) followed by several payments at different stages of construction. The final balance is typically due at closing when the unit is ready for occupancy.

Answer: Before closing, you will have the chance to complete a walkthrough inspection with your agent and a developer representative. During this inspection, any defects will be documented, and the developer typically will have approximately 30 days after closing to address and correct these issues.

Answer: Yes, but it depends on the lender. Some banks offer pre-construction financing, while others might require you to wait until the building is closer to completion. It’s important to check with your lender for their specific requirements.

Answer: Yes, there is a warranty on the finishes and appliances in your new construction condo unit. Appliances generally have a warranty lasting 6 months to one year. Developers typically warranty their work for a reasonable period, sometimes making repairs even months after closing. This can vary by developer, and they may be more accommodating if they still have ongoing closings and repair crews on-site.

Answer: Delays can occur due to various factors like weather, labor shortages, or supply chain issues. Purchase agreements typically include clauses that outline the developer’s obligations and buyers’ rights in case of delays. Buyers should review these clauses carefully and consult a real estate attorney if necessary.

Answer: You’ll need to hire someone you acts in your best interest first. A Pre-construction real estate agent has no loyalty to a building, brand, or developer, so they will make sure that your situation is catered to in the best way possible. Put your best foot forward, and allow Ravelo Residential to lead the way.