Buying new Development

you are wellcome to call me from monday on 212-216-9777x18 for all you want to know regarding new development

Agreed. Especially in regard to this question - new dev is one of the times that avoiding a broker will get you a better deal all around. Developers consider their payouts to your broker as the start of their negotiability . . . brokers DO cost you money in this case.

A few basic tips:
1) Look into the developer. What other buildings has he done? Is he local? What is his rep? Check out some of his developments. Talk to the tenants, see what they think.

2) Check out outstanding tax/building code violations via the various NYC GOV databases. Look at the postings re: Tribeca Space on StreetEasy for nightmares in this area.

3) Read every page of the offering plan. They are legal docs that offer good insight into what the sponsor/developer has to deliver to the owners, how your shared costs are calclated and other risks.

4) During construction physically "keep an eye" on the place, just as you would if you were building your own house. My wife and I literally used to go to the job site and poke around, talk to the workers and see if anything seemed out of whack. Good developers use good contractors. Projects that look haphazard, take too long, etc. are usually indications of an overall bad potential experience.

5) Ask who the other buyers are. Buyers or flippers? Does the ratio fit with your comfort level?

Get a good RE lawyer -- they can walk you through what you need.

A little legwork online and offline can save a lot of headaches . . .

Good luck!

I fully agree about looking into the developer. I'm one of the "unfortunates" who bought into Tribeca Space without doing so. It was only much later that i found out he has no experience with NYC condos and that hes been convicted of fraud by the Attorny General!!! Good God! No wonder the City won't issue any cert of occupancy to the buiulding!!!

I'm not a broker, but I would like to believe a good broker would steer you clear of the bad properties, new or resale...

I agree. Any broker that brings a client to see an apartment in Tribeca Space is not a good broker.

Something else to think about when buying into a new development - be very cautious about believeing what the Selling Agent tells you. They work for the developer - not you - and will say almost anything to sell an apartment. For example, with Tribeca Space, the Selling Agents are Jim Brawders and David Kest of Corcoran Marketing. They've been marketing the building by telling everyone that they'd be able to move in "next month" since the summer of 2006! And theres no hope of anyone moving in until well into 2008!

OP: I'm no expert on this stuff and you may have done the analysis already but the hurdle you have to overcome to break even on a new development is very big compared to buying an existing condo and it's just huge compared to buying into a co-op. I was convinced I wanted a new dev but when I saw how much higher the closing costs are I changed my mind and will probably buy a co-op even with all the associated board bullshit. What i'd love to be able to do on this site is see what the new developments from the last few years are selling for now in the secondary market. Anyone have any good info on this ?

Very good advices from all.

How does payment plan break down? Say 10% down at signing with 5% due in a month etc

thank you

OP: I was at a new dev sales office today. It's 10% down now, the remainder is due at closing when construction is complete.

What do you guys think of flipping pre closing? it seems like a lot of people are doing it.

I think more people talk about it than do it--at least in the market since September.

I thought most new developments have restrictions that prevent you from flipping pre closing, i.e. you can not assign your contract to someone else.

One of the crucial things to observe with new developments is quality of construction. Around March 2006 I visited Tribeca Space/25 Murray Street and was horrified by the hollow steel entrance doors in the units. As a native New Yorker, I knew just from a security standpoint, those doors were dangerous (one kick and someone could be in your apartment). More importantly, in a fire, those flimsy doors wouldn't offer much protection either. I would not be surprised if the flimsy unit doors are one reason for the lack of a certificate of occupancy. For ALL purchases (including new developments), my recommendation is to hire a home inspector. Always verify. The primary fiduciary responsibility of realtors is to their client (i.e., the seller) NOT the buyer!