Those that bought a pre-construction...

what should we look for in the contract? Some people are telling us oh be careful of hidden costs, etc... anything we should be aware of? We haven't settled on a community yet but just want to know what we're getting into. TIA!

Re: Those that bought a pre-construction...

I haven't bought pre-construction but represent builders. Most builders make their contracts non-negotiable but with that being said look for hidden costs like others warned you about. It is usually in a separate paragraph and some of the things that you pay for on new construction is
1. seller's attorney
2. survey fee
3. water hook up
4. pro-rate 1st year insurance (if condo)
5. working capitals (if it is an homeowners association or a condo or both)
6. altough this is not in the contract taxes on new construction tend to be higher than other houses.
7. Purchasers pay transfer tax (usually a seller's cost)
8. Some Homeowners associations have additional fees such as equipment fee or community fee
Every builder is different in what they pass on to the purchaser just make sure you and your attorney review the contract carefully and you go over the numbers as there can be quite a few depending on the builder.

Also make sure your attorney lets you know how long your house/condo can take to build--sometimes builders can take up to 2 years to build them and you can't get out of the contract.

Good Luck. If you want let me know what development you pick--we represent ALOT of builders and maybe it is a development we do.

Message edited 7/18/2007 8:18:11 AM.

Re: Those that bought a pre-construction...

Thanks for the info csorisi... you have FM.

Re: Those that bought a pre-construction...

I would evaluate the market before buying pre-construction. My girlfriend bought pre-construction on Long Island. She went to contract and paid the deposit in early 2006, but the condo will not be completed until early 2008. During that time, housing prices dropped and mortgage rates went up. She probably could have negotiated a much better deal if she waited. Just a thought. Good luck!!