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New developments including luxury condos and massive skyscrapers are popping up all over New York City. They make up 16 percent of Manhattan’s inventory mix. Many of these new residences are bought before the building is even finished, making them highly in demand and fashionable for New York and Foreign buyers. Here’s what you need to do to make sure you’re beating out the competition.
Research the Developer
Reputation says a lot about what you’re getting into with a new development. Look at the past buildings by the developer; are they well known? Have any of them faced major problems? The name behind a development says a lot about the building. A big name will increase demand – and also the price – while a developer with a history of poor or cheap construction is a red flag to stay away.
For comprehensive research, make sure there are no Better Business Bureau complaints filed against them, ask your real estate broker about their reputation, and even visit a few buildings to see how they’ve stood the test of time. A low-quality development and developer is a waste of your money.
Ask How the Square Footage Is Calculated
Square footage has become a controversial measurement as of late, with some measurements varying by 10-20 percent. In one case, the bank of the seller did two appraisals; one said the apartments was 1,634 square feet, another said 1,741. Oftentimes it’s in the best interest of brokers and developers to exaggerate the size because that means a bigger sale.
Regulators have found that some developers add common areas like hallways and elevators to the square footage, or measure the distance from the exterior walls instead of interior. Using these tactics – which aren’t always illegal – can cost buyers thousands of dollars.
Called the “Sight Un-Seen” market, low inventory drives up sales of residences that haven’t been built yet. Some buildings sell more than 75 percent of their residences before they’re halfway done with construction. Those who wait for the building to be completed miss out on the more desirable floorplans and views as well as lower pricing. Although new developments are usually priced at a premium to resales most desirable developments will amend prices even higher as they sell batches of inventory until entirely sold.
If the market is strong, invest in a pre-construction condo that you can move into within a year or two. If you have a flexible timeline, it’s worth the wait to get a floorplan you want — at a better price. However, this tactic is riskier because you have to trust the developer and market even more.
Don’t Ask for Special Amenities
One of the main problems facing the One57 tower in Manhattan is billionaire buyers asking for custom designs and touches. Instead of marble they want hard wood floors, or the bathroom needs a tub as well as a shower. This is both complicating and slowing the building process.
Most custom touches – or requests to bring in your own designers – will be denied due to cost and desire to please other tenants. First, it could slow the move-in process down and cost more. Next, when the new development lets some tenants move in, it doesn’t want them to be bothered by construction sounds, workers, and dust. It’s not fair to those who accept the finishes as is.
As with all real estate, buying a new development comes with risks and rewards. With careful research and the right questions, you could be in the residence of your dreams, and not have to overpay.