As many people in the US have found out (including at least a couple of people in Boston …), buying into a condo development while it’s still under construction can cause you a lot of trouble.
Due to tightening credit (and a lack of buyers …), condo projects are being delayed and canceled, left and right.
In Lowell (or was it Lawrence?), a massive condo development lost its funding after the local paper erroneously reported that asbestos had been found in the building.
In Boston, of course, the NorthPoint condo development has hit turbulent times, with sales slow and the co-developers at each others’ throats, threatening to derail the project, which at one time was nothing but train tracks (pun intended). And, the developer is six months past due on closings.
How to protect yourself?
Experts urge buyers to do their homework before putting any money down:
* Check public records to determine the status of the project
* Look at the builder’s past projects and talking to past customers
* Request the builder’s timeline for each construction phase
* Ensure that down payments are placed into an escrow account and held until builders meet specific conditions
If you have the patience of a saint, you might be willing to wait six, nine, or twelve months (or, in the case of 45 Province, two years).
If you’re like a lot of people, though, when they want to buy, they want to buy and move, right away.
I’ve done both. Would I buy pre-construction, again? I’d think long and hard, and, honestly, the answer, at least right now, is no.
I guess if I owned a big home in the suburbs and was in no hurry to sell, I’d consider it. I’d put my home on the market today
Likewise, if I was a first-time homebuyer going from renting to buying, and wasn’t in a rush, maybe it would be a good thing.
But, again. Be careful. Use a lawyer and check the contract for due dates, etc. Have the contract written so that it gives you an “out” if you want one. Put down as little as possible. Push them on this, and don’t listen to any “we’re not negotiating with anyone …”.
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Updated: 1st Q 2018