Your future home is still being built. Now’s the time to score a good deal on it.
The Manhattan and Brooklyn skylines are filled with cranes and busy crews these days as new condo development continues in New York City. With so much excitement in the air, sponsors are interested in selling new condo units while the shovels are still in the ground. The pre-construction sales market is again hitting a fever pitch, and there are chances to buy into a great opportunity.
But new construction sales have numerous phases, and to get the best deal on a brand-new condo, you’ll have to be careful with your timing. Here’s a quick guide on when to strike.
Stage 1: Initial Marketing
This is when you walk by a construction site and notice a banner alerting you to the fact that a new condo development is on the horizon. The banner has a website, but it’s probably just a teaser that alerts you to the project and offers to send you details when sales start.
Stage 2: Sales Office But No Offerings
Before sales begin, you may get an invite to come into the sales office, which will likely display some of the finishes you can expect to see once the building is completed. This is an opportunity to ask questions, get a feel for what the property will look like, and maybe even get a sense of pricing. The property is likely still 18 months to three years away from occupancy at this point. The offering plan has yet to be approved by the New York attorney general’s office, so until that happens, they can’t send out contracts. However, this is your opportunity to express interest, assuming you have some.
Stage 3: Apartments Officially Released
If there’s something you had your eye on during your initial visit to the sales office, and the property fits your budget, this is the time to strike. Have your broker make an offer, and get the contract out as quickly as possible. For smaller, lower-priced units, developers likely won’t be willing to negotiate. But for larger, higher-priced apartments, they may be willing to help offset some of the closing costs, such as the transfer tax.
Remember, these units have just hit the market, and since the sponsor won’t be releasing all the units at once, there is still an element of scarcity to contend with. If you don’t act fast, you will miss the opportunity at the first release. Maybe you want to wait, because you want to see who will bite first, but in future releases, the pricing will increase. This is your opportunity to get the best deal in the building.
Stage 4: Prices Have Increased
Once contracts go out on the first units, more are released. They will have a higher price per square foot than the other units. This is an incredibly important metric to consider; you always want to have a sense of what comparable properties are trading at. If you are within the first month or two of sales, you can still get a fantastic deal. But if you wait until the building is close to being ready for occupancy, you’ll pay a premium.
Stage 5: Closings Begin, Building Ready for Occupancy
This is when you get to see actual apartment you’ll be purchasing. This is also the point in the sales cycle when a condo will be most expensive. Still, that doesn’t mean it’s not a good buy for you. It might be the perfect buy, because you want the apartment right then, and don’t have the time or patience to wait for the building to completed.
Overall
Never convince yourself that you can’t get a good deal on new development. You can get an amazing deal on new development. It’s just a matter of timing, finding a property that suits your needs, and ensuring that the comps support the price point. Work with a broker to help you create a strategy and navigate the new development terrain so that your purchase isn’t just your dream home but also a fantastic investment.
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