Buying Process Of Preconstruction Condos

Preconstruction condos are structures that have not yet been built and still proposed by a developer. Once you purchase a pre construction condo, you are investing your money down on a structure before its construction thus posing risks on your part as an owner.

Before you buy a preconstruction condo you should be extra careful because technically speaking, you are buying something that is not yet in existence and therefore there is a greater possibility for unforeseen circumstances and setbacks before you get to move in to your new home. However, if you understand well the risks that are involved and you plan carefully, you will be able to avoid the complications that may arise in the future. Here are the several steps that you will go through when buying for a preconstruction condo.

Reservation Agreement

When you want to buy a preconstruction condo, you will have to give a deposit to the developer in order for you to have the reservation of the unit that you would like to purchase and also for the price to be set. However, you should know that the developer can also reserve his right to alter the price that has been set in the contract if the need arises. The deposit would normally be equivalent to a small amount of percentage of the entire price of the unit. This deposit will be held idle and as a buyer, you have a right too to rescind or cancel the agreement any time with a refund of the full amount that you gave for deposit.

Condominium Documents

By the time the development of the condominium's proposal has been approved for construction, the developer will then submit certain documents such as the budgets, unit descriptions, materials, association rules and regulations and other important data for a state approval. Once these documents are all approved, they will be sent to you for review and you should read them carefully in order to make sure that you are comfortable with the association rules that had been set up.

Right Of Cancellation

You will be given by the developer a couple of days for reviewing the condo documents and within this period, you can decide whether you'd want to proceed into a contract or cancel the reservation agreement that you made with the developer. Of course, if you choose to rescind, you will be entitled to a refund.

Contract

If you chose to proceed with the contract, you will be required to pay the balance of the down payment and it is usually fifteen to twenty percent of the total purchase price of the unit. You will have to sign a contract agreeing to purchase the condo unit and normally you will be given seven days to cancel. This will be your last chance to walk away without having to pay for a penalty of breach.

Closing

As soon as construction is nearly finished, you will be issued by the developer a Certificate of Occupancy. A closing date will then be set when you will give the balance of the purchase price and sign all the final documents of the purchase. If everything goes according to plan, your closing will coincide with the date you plan to move in and then you will now be ready to enjoy your new place.