New Development homes for sale

Six questions to ask when buying in a new development

Luxury begins at home. If you’re seeking modern architecture with style and a wish list that might include a golf simulator, a climbing wall, a pet spa, or a landscaped roof terrace—you may find that buying new construction is the most appealing choice to make. It will come at a premium price to the resale market, but for many people it is truly worth it. New developments are popular, and while the media hype is always focused on headline grabbing prices and the glamor of the luxury market, there are many more achievable housing options to explore too. You’ll get warranties on appliances and construction that don’t usually come with a resale property, as well as the satisfaction of knowing that you are the home’s very first resident.

That said, you want to be sure you’re investing in a building that’s smartly designed and soundly constructed. If you think new is for you, here are six questions to ask that go beyond what’s in the building’s prospectus. You’ll probably have more questions and with the Comitini Team representing you, you’ll get the answers you need.

1. What’s the building developer’s track record?

A developer’s reputation is the first clue as to how your experience may go. Not all square footage is created equally, and it helps to know that the builder has a reputation for delivering other high-quality buildings on time, or at least close to it. Closing time frames with new developments are fluid and quality varies. Do they have a track record of cutting corners or overdelivering?

2. Is it true that closing costs for new developments are higher?

Building sponsors will often ask for you to pay for things as a buyer which a resale owner would usually pay for when they sell an apartment. These will include the state and city property transfer taxes. These additional costs can add up and are out of pocket, not rolled up into the mortgage. Since 2019, NYS transfer taxes are 0.4% for residential transactions below $3 million, and 0.65% for transactions above that mark. Additionally, NYC transfer taxes are 1% for properties $500,000 or less, and 1.425% for properties over that amount. That’s a hefty $18,250 out of pocket for every $1 million of sale price up to $3 million, tack on another quarter point on sales above that. You also may have to pay into a “working capital fund” that can be the equivalent of a month or two of common charges. A downpayment above a basic 10% escrow deposit are not uncommon and may be contractually required on a schedule upfront, but may be taken back as debt at closing. Covering costs for the seller’s and bank’s attorneys, and even printing of the offering plan are sometimes in the fine print too. We help our clients negotiate these complex closing requirements, negotiate them down, and/or shift who pays them as much as possible.

3. What if my move-in is delayed?

If you’re moving into a new building, you may need more patience and flexibility than if you were moving into an established residential building. That’s because there could be construction issues or unforeseen delays. These are not uncommon and even to be expected within reason. Negotiating an opt-out clause if your apartment isn’t ready for move-in within an extended period of time can offer you some protection if the sponsor is simply not delivering as promised.

4. What if my building’s empty units are bought by investors?

As you get focused on a particular new development, we will research how many units in the building have been bought by investors who might be purchasing the apartments to rent out. With a more transient building profile, there may be a lot of move-ins and move-outs, which may leave the building feeling less neighborly than you’d like. Owner occupancy is also a key metric that banks use when considering whether to lend on the project and at what rate; so your choices could be more limited for financing. High rates of investment ownership can affect your deal financially and your quality of life as an owner-occupant.

5. How do I know the walls aren’t going to be paper-thin?

If you’re worried that the building will have lousy soundproofing, ask us to find out what materials and acoustical treatments were used in the construction of each residence. While you’re at it, ask about interior finishes, ceiling heights, and even whether windows open in the units. The quality of construction varies between buildings. Are you getting what you paid for? You may look at finishes in a showroom rather than in a finished apartment. The sponsor needs to deliver on the details and asking the right questions before you sign is what we help you do.

6. Where should I begin?

Most home purchases today start online. You can search through every new development listing available here on comitini.com. Contact us with your questions about a buying a new home. We will answer them, not sell your contact info like Zillow or Streeteasy. We want to be your broker. You can even schedule a free consultation with us over Zoom right here too. Sponsors are never casually testing the waters. They actually need to sell and can be notoriously tough to negotiate with. That’s where my experience can make the difference between a great acquisition, overpaying, or missing an opportunity. Plus there is no fee paid by new development buyers for my services.

Pro tip: never walk into a developer’s sales office or tour a property on your own. Bring us. The sponsors have their agents on-site. You deserve reliable representation on your side too, and you may lose that edge by not taking to us first. My team will provide outreach to the sponsor’s representatives and manage the entire process. We will set showings of property virtually and/or on-site as needed and ask the right questions. We will work to formulate and negotiate an offer with the best outcome for you. Working with the Comitini Team from the start assures that we are there as your advocate. We provide a boutique buying experience and act as your fiduciary, as well as your concierge. Ask us more about how that works.