Tuesday, November 27, 2007

Condo Shopping

If you're shopping for a brand new condo rather than a re-sale, it's a different process that requires a special understanding of what you're getting into as well as a patient attitude.

Ron Chaquica is the Sales Manager for Smart Corner, a condo project that's being built in downtown San Diego, California. Chaquica says the project will have 300 units of both residential and retail space, ranging from $189,000 for a unit up to $700,000.

"The unique thing is you get to buy a home at today's price and by the time the buyer is moving in and closing escrow in two years, the market has increased. So [the buyer] has instant equity," says Chaquica.

New condo projects or condo conversions are being built all over San Diego. But how do you get into these types of projects? Generally you can expect to be put on a waiting list along with hundreds of other potential buyers.

Once a unit is selected, usually a buyer puts $5,000 down initially for a reservation and then after about six months a buyer enters a legal binding contract and will be required to put down five percent of the purchase price, but it could still be a couple of years before the actual close of escrow.

"[The buyer] isn't making a monthly payment, [but is] locked in at today's price. It's an investment basically," explains Chaquica.

"During this time we will still be managing [the buyer's] file, advising the buyer. A lot of first-time buyers, they're new to this so we have to make sure that they don't go out and buy a new car or spend a lot of money prior to them closing escrow with us," says Chaquica.

Buyers will have options to select and personalize the living space by choosing things such as appliances, counter tops, cabinets and flooring.

"I'm [talking about] selling tract homes, but on average people would upgrade between 7-10 percent of the value of the home," says Patrick Evans, Sales Associate with Smart Corner.

When buying a new condo patience is critical because the process is much slower than buying a new tract home, "Tract homes go by phases. You can build 10 homes a phase so [buyers] can move in, but you haven't completed a whole community just a phase [of the project]," explains Chaquica.

With a condo project, "You're creating a whole new building, it's like a little city. I mean you have 19 floors, 300 units, retail, commercial, underground parking, you're creating something from scratch so it's a two-year process at least," says Chaquica.

When it comes time to close escrow there will be a final inspection. If a buyer wants, just like with re-sales, an inspector can be hired to check out the new condo. The inspection is paid for by the buyer.

"[Buyers] are going to do a complete walk through prior to taking over possession of the property ... [Buyers] can bring an inspector in at that point ... to make sure it's up to satisfaction and [buyers] will have an item list with a few little items that need to be fixed or replaced. The builder will fix or replace them prior to the move in," says Chaquica. If however, it's a major item, a part may need to be ordered and could delay the repair.

A new condo is under warranty for a period of time, so make sure you find out who the builder is. It's always good to have that information handy should you need help in the future.

Source : http://www.condocondo.com/

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