Real Estate of Mind - Buying a Condo Pre-Construction - Hawaii News Now - KGMB and KHNL

Real Estate of Mind - Buying a Condo Pre-Construction

HONOLULU (HawaiiNewsNow) - On today's Real Estate of Mind, Khai Tran (RA) of Coldwell Banker Pacific Properties joins us to talk about purchasing a condominium that's not yet built. Khai says there are some distinct advantages. Watch the video of his interview and read his bullet points below.

Subject: Purchasing a condominium that's not yet built (pre-construction condos).

  • The process is similar to purchasing an already-constructed home, but takes a longer time period since the building is not yet built.
    • A deposit, usually 5% of unit price, is required to reserve a unit.  This deposit is held in escrow.
    • Once development is approved for construction, you'll receive a Public report includes association rules, unit description, budget, etc.) to review. You will have 30 days to decide whether you'd like to proceed with the contract. If you don't, you can withdraw with a refund.
    • If you'd like to proceed with the purchase, you'll need to provide another 5%, and the remaining 5% 5 months away.
    • When construction is nearly finished and a closing date is set, you'll sign the final documents and pay the balance of the purchase price.
  • Advantages to purchasing a pre-construction condo
    • One main advantage of purchasing a pre-construction condo is that you often get a unit at a lower price than if you were to buy when the construction is complete. Developers typically need sales of 50-90% before they can borrow funds to begin construction, hence the incentive pricing.
    • The market value of pre-construction generally increases after completion, so your unit may be worth more that what you've paid.
    • You often can select the finishes to customize your home.
  • Example project: The Cove Waikiki

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