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The prospect of shopping for a new construction residence can be quite daunting, but the rewards of owning a brand new home out-weight the disadvantages if you know the potential pitfalls. The following are important considerations: Overall Dollar Budget, Location, Cost Per Square Foot, Finishes, Upgrades, Parking and Delivery Date, Get the Right Ad Information?s from appropriate websites such as My Classified Ads

Overall Dollar Budget

If your down payment is less than 20% of the purchase price, your lender will require that you purchase private mortgage insurance (PMI) ? this charge will also be included in your monthly payment. Also factored into your monthly expenses are your assessments, both for the unit itself and a separate assessment for parking. And finally, add your monthly mortgage payment.

Location

Note; that as density increases with new development, it is highly likely that your property will gain in value, resulting in a higher return on your investment, so choose your location wisely!

Cost Per Square Foot

Also to be considered when looking at the cost per square foot price is whether the developer has included such items as granite counter tops, marble bathrooms, and black or stainless appliances as standard features. In Chicago, prices per square foot range from $225 to as much as $1000 per square foot in the Gold Coast.

Finishes

Be sure to get a detailed list of specifications in writing from the developer, indicating the brand and model number of each appliance. Don’t be confused by the finishes and appliances that are shown in the models you see- they may not be the same as those included in the quoted price. Models are typically finished with granite and marble, undermount sinks and hardwood floor laid diagonally but such features may not be considered standard, particularly in smaller or less expensive units.

Upgrades

If you keep in mind that many new construction units are not ready for occupancy for a year or two, you will understand the importance of having all upgrade costs in writing as part of the initial contract ? at today’s prices rather than at costs calculated at inflated prices one or two years later.

Parking

Since parking spaces have dramatically increased in value, you should seriously consider purchasing a space whether or not you currently own a car. Without parking, the later sale of a unit may be more difficult than that of a comparable unit for which parking is included in the price.

Delivery Date

Although your contract will specify a delivery date, provisions in the contract will often allow the developer to deliver your unit much later than the specified date without penalty. If this is an important issue to you, you should keep in constant contact with your Realtor during the construction process as delivery dates can be delayed for as long as a year and, in rare occasions, even beyond that. You should also speak with your attorney and incorporate terms into the contract so that your interests are protected in the event this should occur.

Working With A Realtor

Purchasing a new construction residence can be a rewarding experience and a wise investment. But there are definitely nuances involved in purchasing new construction, including the track record of the developer, the number of “flippers” purchasing in the project, and the percentage of sold units.
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