The Expensive Pitfalls of New Construction

Feb 28, 2008

Want to buy, but not renovate? Like things shiny, bright and new? You are obviously a perfect candidate for new construction. But take a deep breath and be sure to have a good real estate broker and attorney by your side before you sign a contract for one of those new luxury condos.

There are some drawbacks to purchasing a new construction. To begin with, the offering plans are almost always written to protect the developer and not the consumer. Closing dates may be extended indefinitely with no penalty by the developer. You might also be forced to close with very little advance notice. Promises made about certain building amenities and features may not be delivered. You should hire an experienced Manhattan real estate attorney to protect your interests.

Closing costs for a new construction are also far higher than for a resale. Indeed, they can easily exceed 5 percent of the sales price. For instance, buyers are required to pay all the transfer taxes which are paid by the seller with a resale. Developers are sticking firm with selling prices, but you may be able to negotiate a reduction in the closing costs.

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