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September 24, 2009
Offer Accepted - Now What?
So I may not be a Property Virgin for much longer (fingers crossed). Just had an offer accepted on a new construction condo (yes, I know a lot of people here are anti-new contruction condos, but I really love the place and the price was right).
The contract has been sent to my attorney, but I'm wondering what else I can expect from here?
With new construction, I assume if there is an "inspection" process it's quite different than what happens with other property -- can anyone enlighten me about that and about "punch points"?
What else should I be thinking about before I sign the contract or go to closing?
Thanks, guys. I love Brownstoner!
PV
Comments
'punch list' is a walk-through of the property with the developer/contractor to see what still needs fixing. Holes behind sink, sloppy seams, whatever.
Posted by: denton at September 23, 2009 8:29 PM
Is the construction 100% completed? If not, you could be in for a long wait as there are often delays. Be sure to go through the offering plan very carefully before you sign - there may also be amendments to it too. Be very aggressive with the closing costs and try to get the sponsor to pick up as much as you can. Also, look out for the transfer tax - it adds a significant chunk of money if you have to pick it up. Good luck!
Posted by: Suntory at September 24, 2009 7:17 AM
See what guarantees there are about completion & move-in so you don't get hung up w/ an expired lease where you are.
Posted by: Arkady at September 24, 2009 9:16 AM
Thanks, guys! These are all good points and I will keep them in mind.
As a note, the construction is complete (with the exception of a few cosmetic touches, like finishing off the roof terrace), and the building is already half-occupied (i.e., people living in their apartments). A couple of additional units are in contract, so this place is nearing that magical 70% -- if I make it to close, we'll hit that number.
Question: I just recently noticed on the condo's website that they show the closets as having poles in them, but I didn't notice any in my unit's closets. Is this something I would bring up when I do the walk-through, or do I need to bring it up before the contract is signed?
Thanks again, guys!
PV
Posted by: PropertyVirgin at September 24, 2009 9:52 AM
That's a punch list item - keep an eye out for similar missing things. The "reasoning" is that some people want customized closet fixtures.
Posted by: Arkady at September 24, 2009 10:00 AM
1. You have THE Offering Plan for the condo. Did your lawyer explained to you what you need to know about this condo (like condo boards, date, rescission, etc)?
2. You can hire an inspector BUT he will probably will be limited only to your space and not the common areas (rooftop, basement, etc).
3. If the offer has been accepted, it istime to dot your 'i's and cross your 't's regarding your mortgage. I assume you got pre APPROVED (not just pre qualified).
4. The inspection and your own walk through is part of the 'punch list' process. Anything you see major can STOP the closing until fixed. Anything minor should be fixed BEFORE closing. If the developer said they will not be able to by a certain date make sure they give you another date. Either way EVERYTHING must be in writing and your lawyer gets a copy (dates, list, etc). Be detail oriented (open EVERY door and drawers, every electric socket, every knob, etc) . If you don't catch it now you may have difficulty getting it done after.
5. Don't be in a hurry to CLOSE or MOVE. Make sure your punch list is in good shape first.
Posted by: crimsonson at September 24, 2009 12:22 PM
6. You're excited for a reason, you're offer is accpeted, now STOP being excited and pay attention, you're a long way from closing and moving in, anything can happen, so take a deep breath and make sure everything is in order and make sure your attorney and mortage broker are reputable and doing their job. They could screw things up in a jiffy.
Posted by: IrieMan at September 24, 2009 1:01 PM
Again, great points -- thanks so much!
OK, I want to get this whole process right and I'm going to take my time and be careful during inspection/punch list creation.
Can anyone tell me about how much it would cost to hire my own inspector to join me on the walk-through? And does anyone have someone to recommend?
My attorney comes highly recommended and seems top-notch, but what are some other things I should be asking her to look out for on my behalf?
Again, thanks to all!
PV
Posted by: PropertyVirgin at September 24, 2009 1:23 PM
One point of negotiation (if there is any room left for it, sound like it is prob not) would be to have the developer pay the transfer taxes. One of those stupid "hot" market things was that the developers make you pay transfer taxes (about 2%) on the way in. Then you have to pay them again on the way out when you sell.
Posted by: Brokedeveloper at September 24, 2009 1:52 PM
Inspectors vary from $300 to $500. It is usually based on size of the unit. The bigger the home higher the fee. For a NYC 1BR condo, expect around $350.
You should ask what is NOT done with the building. The ability to be able to move in does not necessarily mean construction is 100% done.
Also ask the tax abatement status (if there is one). Have they filed for it? When do they actually expect it to happen. This process can take months. At that time you may end up paying higher taxes than you initially expect.
Also check the status of common charges. The first year is based on early estimation.
Posted by: crimsonson at September 24, 2009 1:52 PM
Make sure to read schedule A and schedule B. The 2 most imp documents in the offering. And always read any amendments.
Sched A is the budget. Notice that 100 percent of the income should be common charges. If not, see if they expect some portion of the building to be rental or commercial.
Posted by: bonsavant at September 24, 2009 3:19 PM
Make sure to read schedule A and schedule B. The 2 most imp documents in the offering. And always read any amendments.
Sched A is the budget. Notice that 100 percent of the income should be common charges. If not, see if they expect some portion of the building to be rental or commercial.
Posted by: bonsavant at September 24, 2009 3:19 PM
definitely get an inspector. ours had the opportunity to explore the entire building as there is access to the roof (roof deck) and the utility room and the room with the water pipes/sewer connection.
he really helped us. we did go continually to the unit until close and got several things changed.
get the punch list in your closing requirements.
good luck and congratulations.
Posted by: wine lover at September 24, 2009 3:31 PM
oh yeah, most new spaces need things like closet poles and bathroom accessories (rod, towel racks, etc..) allows people to add what they like. we added all that stuff plus medicine cabinets.
we were happy to do this ourselves because it became more customized, and we got what we wanted.
Posted by: wine lover at September 24, 2009 3:34 PM
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