^Condo
There is a big new condo building getting built in my town that was started 5 years ago and has had lots of progress problems. How does it work if someone “bought one” when they started marketing 5 years ago, but it still is not completed? Do they close and get the loan when it’s complete? Or have they been making payments on the full offer price the last 5 years during all these delays? Would they have the interest rate from when they made the offer 5 years ago, or today’s rate? What if they just found out the HOA cost is big bucks and they can no longer afford it?
When do co do new builds close?
byu/Dotdashdotdot inRealEstate
Posted by Dotdashdotdot
2 Comments
Usually they put down earnest money and sign a purchase agreement but don’t actually close until the building gets its certificate of occupancy. So no mortgage payments for 5 years, but man that sucks being locked in at today’s rates when they probably qualified at like 2.5% back then
As for the HOA surprise – that’s rough but they might be able to get out if the fees weren’t properly disclosed in the original docs
In my state (MD):
– can’t close until you get a certificate of occupancy from the county
– you put down earnest money when you sign the contract and everything else when you close, like normal. No payments bc the mortgage doesn’t exist until closing
– you can lock in your rate usually about 6mos from closing. So you’re stuck on their schedule
– the contract likely has a timeframe that if the builder goes beyond, you’re allowed to leave with your earnest money back. The one in my contract was 2 years.
– if anything about the HOA changes, they have to tell you, and you get 3 days from their notice to back out of the contract and get your earnest money back if you don’t like the change