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Thursday, July 17, 2008

Buying a New Condo?

July 17, 2008
Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC

Buying a New Condo…
With almost all new construction, the contract originates with the builder. There is language specific to new construction that outlines the process, the steps, somewhat of a time line, substitution of like materials, delays, deposits…well, you get my drift.To my way of interpreting these documents, there is very little, if any, room for the buyer. Sure, there are the disclosures about having an attorney review them. I have never had anyone change them, alter them in any way. I think it is time.I am hoping that good will come of this mess we are all in…and that buyers will realize that they can be in the driver’s seat…or at least perhaps the playing field can be leveled.To this extent:I read this morning and I knew it…about the failure of The Park and how the buyers could probably kiss their good faith money goodbye because of the following: a clause in the contract which says the developer can spend owners' deposits once construction begins means the buyer’s deposit is gone. Maybe that should read that the good faith money is just that…and that it is held in a Trust account as in most real estate transactions.And another situation: a buyer gives 10,000 good faith money/deposit on a 200,000 condo that has yet to be started but was slated to start in less than 6 months. The market slowed, the sub-prime hit and the project was stopped. But it took incessant hounding to get that money back for the buyer. So maybe there should be a time-line for starting and one for finishing…because the buyer in this instance lost valuable time…interest deductions, etc. Who gambled here?And I think all buyers should hire an inspector as construction starts and goes along. And I would very definitely include radon testing because we are seeing more and more evidence even in the multiple stories. Maybe having an inspector routinely check the progress would call attention to poor building materials and shoddy construction. Maybe.And I also think in the offer to purchase there should be a clause about the rebate that would mandatory should the builder sell out the last small per cent of the units at a discounted price…a practice we have seen repeatedly.And I also firmly believe that there should be language that states the buyer will not close, does not have to close until all the repairs are made to his/her satisfaction. And that if this is not met, the builder is responsible for the buyer’s costs, movers, and lease, whatever.I am sure there will be other issues…and I will also address resales and steps you might want to consider.

Lynnsy Logue The Real Estate Lady and Condo CanDo in Charlotte, NC

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