The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Hargrove on July 15, 2019, 11:29:26 AM
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Hello,
I'm looking at an opportunity to buy a condo in an area of Utah my wife and I were considering moving to. Unfortunately, I'm kind of at the mercy of a seller contract and a raging market.
The area values keep going up up up, and the pricing is very good. It would be a long-distance move, but we saved enough to make it reasonable and get off the treadmill of rent increases and a job I don't much care for where we are. Unfortunately, the seller is not exactly helping me feel great about it (the seller agent was kind of slow to respond at first, but apparently someone gave him a talking to). I have no yardstick to understand common or uncommon features of buying new construction. Can anyone weigh in?
We have a price and REPC, not yet signed. Price is good, upgrades are discussed at the pre-construction meeting in 14 days from acceptance, which I will see if I can Skype. They built several other complexes that seem to have been well-received over the last few years.
1) There is no substantial completion deadline, which I would assume would be flexible anyway, but do these sometimes just not list a substantial completion deadline? Aren't the other deadlines irrelevant if they're based on the substantial completion deadline? I don't care if it takes extra time, it just seems weird they don't even list one. I eventually got a response that since it's brand new (just permitted and nothing done yet), they will add a clause "notifying us at least 60 days prior to the substantial completion deadline" when they get closer to it.
2) We received no HoA fee information, other than a verbal commitment to 70/mo. There is a notice there may be an "initial" fee, which we dug a little to discover Utah law caps it at 0.5%, so we're not worried about that. Is it common to wait on HoA info on new construction? Would that be part of the seller disclosure deadline (7 days from acceptance)? We know builders sometimes juice the HoA fee before they give over the HoA to the owners, and we don't really care if the HoA becomes 110 or whatever. HoA fees where we are are 250-500.
3) Due diligence: this period was listed as 14 days from acceptance. What due diligence can I do on a building that doesn't exist yet...? Is there a "normal" window?
4) We had a verbal explanation about including dishwasher and stove but not fridge - we don't see this in the REPC. Should it be there or is that a pre-construction meeting thing?
Basically, I'm concerned about what I don't know and am aware there's potential to abuse a contract where the seller doesn't even need to involve an agent. They can do this because it's a great area and prices are skyrocketing and they seem to have a good reputation (multiple city contracts, FHA approval etc). But, I just have no experience with norms of this process and am not willing to go with only the seller's recommendations. Imagine buying a car that way. O_o
Thank you for any advice you may have. I'm not sure I can involve a realtor because we don't have an extra commission's worth of incentive to offer for a consultation (especially if we don't even wind up taking it after the consultation). It seems this may be our last opportunity to be in the area at a reasonable price.