There are a two ways to purchase a condominium. You can either a) purchase a unit in an existing building, or b) you can reserve a unit in a to-be-built building. Here are a handful of reasons why you shouldn’t be afraid of option b).
When a developer is trying to get a building out of the ground, they need to show momentum and progress to banks and investors. There’s no better way to show progress than securing a large number of pre-construction reservations or sales contracts. It’s during this period that the developer has the most freedom to adjust pricing. Once the project is funded and under construction, it’s not just the developer making the decisions. At that point, there is typically a construction lender who has strict covenants in the construction loan outlining the minimum sales price for each unit. In other words, the developer loses at least some of their flexibility to give discounts once the project is underway.
This one is obvious, but the earlier you commit to a project, the better choice of units you will have. This is important in projects with views facing different directions. In a large number of beach projects, there are only units facing the ocean so this may not matter as much; however, in urban projects, it’s common for units to face in different directions. If you are considering an urban project, you may want to lock up your top choice sooner rather than later if views are important to you.
Developers want to build great projects. When they share with you their design and operational plans, they are showing you their best ideas. If you see something you don’t like, or feel like something is missing, then the chances are someone else feels the same way. If you take this opportunity to tell the developer what you’re thinking, he or she may actually listen and implement your ideas. There’s certainly no guarantee, but if it makes sense and if it is cost neutral or a cost savings, there’s no reason they shouldn’t at least listen. These types of changes can only be made while the building is living on paper. Once the building is under construction, the chances of making any type of material change are very, very small…it costs a lot more to move a wall on a slab of concrete than it does to move a wall in a computer program.
Time to Recruit
Some families love vacationing and traveling with other families or extended members of their own family. If you are buying a second home, what would be more fun that having your best friends or extended family (in rare cases) having a unit right next door? The logistics are easier, the trips are more fun, and the developer will probably give you a deal on two units as opposed to purchasing one. It’s easier to do this when you have plenty of units from which to choose. If you wait until construction is underway or almost complete, the probability of having two contiguous units, facing a direction you love, which are the right size and price, quickly goes to zero.
Enjoying the Planning
Committing to a condo before you can take possession provides you an opportunity to enjoy it before it even exists. If you make a reservation some time before it’s compete, you’ll have a chance to talk about it with loved ones, make plans about who gets to use it and when, plan the decorating, and cheer for it as it comes out of the ground. These are all fun and positive thoughts…things you like thinking about. Why deny yourself the un-guilty pleasure of having something exciting to look forward to? This is the sort of thing that brings families and friends together in a very healthy and positive way.