While some people like old traditional homes, others want brand new homes. With some areas creating new homes left and right, pre- sales are becoming more and more attractive to many potential borrowers across the nation.
1. Opportunities with limited options
With real estate prices on the rise in several areas nationwide, many buyers are trying to buy quickly before the price of homeownership surges any more. Despite this observation, several local housing markets are still searching for real estate investments. The best new home deals may be available where housing inventory is very low.
2. Shopping in a buyers’ market
An example of this could be where you see your dream home sitting right in front of you. Even if that home or condo is a tad too expensive, buyers’ markets enable some to afford to bend the rules. Whether this notion applies to a newly built home or a $50 million duplex penthouse development, developers may take a $25 million deposit check over nothing. Taking advantage of a buy-off plan could equally land you that dream home for you and your family.
3. The home has never been used
This perk of pre-sales may be the most obvious for buyers who are only interested in something new. After all, there’s nothing better than taking a bath in a bathtub that has never been used before.
1. Sketchy developers
Even if a development seems to be a legitimate one, keep in mind that real estate developers can easily license a name and face as appealing as Donald Trump’s to make it seem fair and authentic. An incident just like this one took place back in 2006, when a resort development on Mexico’s Baja California coast used Donald Trump’s face on billboards to lure in unsuspecting investors. Huge deposits, and even life savings can be lost during these acts. Researching is always essential when investing in any type of property, especially during a pre-sale. Just googling your developers name could save a few hundred lives.
2. Realize what you’re buying into
One thing that this warning may apply to coincides with lenders themselves. Although title insurance for example may benefit a borrower, such policies don’t always payout as expected. Deceptive clauses in everyone’s contracts need to be watched out for. Some developers often times try to slip in waivers that permit them to alter specifications such as room or plot sizes. Although things like this may seem illegal, loopholes may be completely legitimate even in the US. Be sure to assert yourself and get exactly what you pay for. Questions that may be asked in situations such as these are:
- Is enough information being provided?
- You know how long and wide each room is, but what about ceiling heights?
- Is the central air energy-efficient?
- Are construction materials and techniques proven?
- What’s the insulation like?
- Might nearby land be developed, ruining the views you value so much?