As the housing market has changed to a cooling off cycle, developers have also changed their strategies. Rather than build new developments on speculation and give buyers their pick of new homes, builders now rely on preconstruction sales to determine whether or not to break ground. With prices still expected to go down in the resale market, it’s important to protect your investment. For buyers thinking about a preconstruction purchase:
· Negotiate an exit strategy within the contract. Lead times have been growing longer, so it is not unreasonable to state a “break ground” date, which if not adhered to, releases you from the contract.
· Ask for an interest bearing account for your deposit until ground breaking.
· Make sure all changes to the original contract are in writing with color and style selections specified.
· Based on the current market, builders may be offering sales incentives to lure buyers. Check often for model price reductions.
· Negotiate an exit strategy within the contract. Lead times have been growing longer, so it is not unreasonable to state a “break ground” date, which if not adhered to, releases you from the contract.
· Ask for an interest bearing account for your deposit until ground breaking.
· Make sure all changes to the original contract are in writing with color and style selections specified.
· Based on the current market, builders may be offering sales incentives to lure buyers. Check often for model price reductions.
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