The Pros and Cons of Buying a Condo for Sale in NYC in a Pre-Sale
For most people, the prospect of buying an apartment for sale in NYC sight unseen seems incongruous, but it is a prospect that is becoming the new reality for many buyers. In fact, according to a Bond New York report, 45 percent of contracts signed for units at $4 million or more during the fourth quarter of 2014 were based on nothing more than floorplans. Almost half of the luxury condos in New York that were sold during that time had not even been built. There can be many advantages and disadvantages related to purchasing new construction still in the development phase.
Advantages of Buying a Pre-Sale Condo in NYC
Among the top advantages of purchasing a condo while it is still in the pre-sale phase is that you will typically have the opportunity to completely customize your unit. Additionally, purchasing early in the development phase will often give you the opportunity to buy when prices are at their lowest point. In most cases, prices of condos for sale in NYC will appreciate over time.
It is also important to consider that buying new usually means that you will have lower maintenance fees, as the monthly fee will often remain the same from the time that construction is completed toat least several years later.
Disadvantages of Buying a Pre-Sale Condo in NYC
As is the case when buying any other apartment or condo in New York City, there are also some drawbacks to buying while the property is still in the pre-sale phase. Among the most important possible drawbacks to consider is that in terms of investment, your funds will be tied up for the duration of the development phase. You must also consider that you will have paid out money for something that is still intangible. This might not be much of a concern for you if you have invested in properties in development in the past. If,however, you are new to the idea of buying a condo in development, then paying for something that is still nothing more than an artist's rendering and floorplan might be somewhat disconcerting to you.
You must also consider the reality that there could be delays in terms of your unit being completed. Delays can occur due to a variety of reasons, including labor shortages, weather, inspection problems, and supplier problems. It is also important to consider that layout plans could change without any input from you. The reality is that the developer can often maintain the right to make changes.
Finally, you should be aware that there is the possibility that the market could change prior to the date of completion. This could result in a drop or appreciation in market value for your condo.