Cities & Communities : Washington DC

Considering New Builds in the DC Metro Area

Are you considering buying a new build residential real estate in the Washington DC Metro Area?  If so there are ways to make sure that your transaction shall go through smoothly, or to make sure you are protected if the transaction begins to head south.  Many consumers would love to move into a brand new place, but they do not know how to pursue this transaction while protecting there best interest.  If this is you please read on further.

Tasks to make sure that your transaction is smooth

•  Find a Realtor.
  • You want someone working on your behalf; if you use the realtor on the site there fiduciary duty is to there client the builder not you.  On the other hand if you sign an agreement with a realtor, his fiduciary duty is to you. This means that he has to look out for your best interest and is there to help protect you.  In most cases the seller has agreed to pay your agents commission.  The Realtor has experience reviewing contracts and can make sure that all the T's are crossed and all the I's are dotted.
• Research the developer/builder of the home or complex that you are considering to purchase.
  •  One of the best ways to find out about a developer is the internet.  This can be a potential buyer's best friend and best resource; if you use a Realtor they should do this for you.  When doing this research things to look for, are the names of other complexes that this developer/builder has built.  You want to find out about the developer/builders track record.  Do his projects usually run on time, or have majority of them had delayed openings?  If they usually are delayed most likely this will continue in the future.  Another way to find out about the developer is ask people who live in this and other complexes that he has built.
• Ways to possibly prevent yourself from investing in a condo that may turn into rentals.
  • One of the easiest ways to find out if the development may be turning into apartments is, find out what percent of units have already been sold.  If it was up to me I would look for developments that are any where between 50% and 60%.  I personally believe that a builder will not change his plans if he has already sold out a majority or even a little over half of the units in the development.
• The Dreaded Contract
  • Negotiating a contract for yourself can be hard since they may not be buyer friendly.  This is major reason why it's good to have a Realtor working on your behalf.  It may be difficult to insert certain provisions that would allow you to walk away due to uncertain hardships.  A Realtor on the other hand is familiar with contracts and will hopefully have an easier time getting you what you want.
  • One of the most important things you should do, is make sure the deposit is held in an escrow account and preferably with a 3rd party (Title Company).  This way you are insuring that the deposit is not being used as working capital for the developer.  Another reason this is a good idea is if the developer goes bankrupt.  Money being held by a third party should be easier to recoup than if the developer has the money in one of his accounts.   Finally you want to get written verification on where the deposit has been made.   
  • Finally there is the deadline clause.  This clause gives the developer a deadline for completion of his project. If he does not meet this mark he may have to return the deposit to you.  This clause is there to protect the buyer, but watch out.  Some developers may want to rush a closing if this is the case.  Remember to do things at your pace.  In this way you are protected and never feel rushed.

I hope that you find the information in this article pertinent, and if you have any question please fell free to contact us.