Are you considering buying a new construction? That’s a smart move, but it is important to conduct your research and ask a few questions before going ahead with the purchase. Real estate investment can make you a lot of money in the long run provided you do your research and play your cards right.
Here are 7 critical questions to ask when buying a new construction.
What warranties do you offer?
You must make it a point to ask the real estate developer about the warranties provided by them. Many builders offer a 1-year workmanship warranty and possible, a 10-year structural warranty. Examine the warranty closely and find out what it covers and what it doesn’t. Make a note of the limitations for damages, if any. You should be offered manufacturer’s warranties on the air conditioner, water heater, washer and dryer as well.
Can I talk to some of your past clients?
You should ask the builder to talk to some of their past clients. You should ask their past clients questions such as just how responsive was the builder to their specific concerns? Ask them if they would purchase a property from the builder again, if given the opportunity to do so. The problem with this approach is that most builders would only give you the contact numbers of their most satisfied clients. You should look for the contact information of other clients on your own, which would require at least some digging.
Would you suggest selling the property or renting it out for the long-term?
There is no perfect answer to this, but it doesn’t hurt to ask the builder’s opinion on the investment potential of the property. Ask them about the demand for the property and whether they would recommend reselling it after a few years or to hold on to it for the long-term. Ask them about the rental income that they would expect the property to generate per year. You can ask this question to your real estate agent as well, who would be a more objective person in this situation.
How is the local property market doing? Is it on the up or on the down? What are the prospects for the future?
If you are buying a new construction in a country like Greece, you would no doubt be worried about the economic situation. But as your real estate agent would tell you, Greek Islands such as Mykonos has been largely insulated from the general situation in Greece. Here the property market continues to thrive. The estate agent and developer would have special knowledge about the local property market, don’t hesitate to ask them about it.
Do you have any long-term plans for the community?
It is possible that your new construction is just one among a series of new properties that the developer has got planned. So ask them about their plans – have all the properties been built already or do they have more planned for the future? This is important as you wouldn’t want to be surrounded by construction activity all around you when you stay at your new home. The noise from the building activity can be overbearing. So you should buy a new construction from a development that is at a very mature stage, and where most of the homes have already been built.
Do you accept an all-cash payment for the property?
Cash buyers are very common today, but make it a point to ask the real estate developer if they would accept an all cash payment for the property, and if there are any discounts for such purchases.
What is the original listing price?
Although you are buying a new construction, it is possible that the price was changed several times since the property was first listed by the developer. Ask them about the original price and if it has been changed, find out the reason for the reason.
Conclusion
An investment in a new construction can be highly rewarding and pay off quite significantly in the long run. However, you must be prepared to do your research. Make sure to ask the 7 questions listed here to a builder or estate agent before proceeding with the purchase.