Buying into a new development can be really exciting and profitable. You get to purchase a property at today’s prices that is only going to be delivered in 2 to 3 years, which theoretically means your property will already start appreciating before it exists!
This can be a tricky game, so we’re showing you what to look for so you don’t get duped into a bad situation.
The bait and switch
The first thing a developer might do is show you a model unit that is not the base price. Every single development ad will say, “Homes starting at …” and name a low price. But that base cost doesn’t include lots of things.
If we’re looking at condos, you probably won’t have a quartz upgrade, a backsplash, light fixtures, heated floors, and so on. When talking about a house, you probably don’t have a driveway, grass, or a fence. The interior is also going to have base finishings.
Beyond that, most of the time, the unit in their showroom is going to have all the extras, all the bells and whistles. So you’ll walk in and fall in love after anchoring on the base price, then they’ll say, “Well, this is going to cost you [insert higher amount here].”
All of a sudden, you’re floored. You can’t believe it. It’s so far from what you were expecting.
The square footage sham
Let’s look at gross square footage versus net square footage. It’s something that developers do all the time: when you are selling a property for the first time, you’re calculating the footprint based on gross square footage. That includes 2 to 3 inches behind each wall, giving you a surface area that’s about 10% larger than the net square footage.
After that initial sale, the seller will only talk about the net. So, you want to make sure that you’re
really paying attention: are the developers quoting the gross square footage? Are balconies and the basement included in these measurements?
These are all little tricks that developers sometimes use to make a unit seem bigger than it actually is.
The corner catch
Often, developers will show you a corner unit because it has a lot more windows, better views, and a lot more light. However, it likely does not represent the unit that you’re actually able to afford.
So if you’re looking at a corner unit in a development, you’re typically going to see windows on three sides, whereas any other unit will only have them in the front and back. It’s a completely different level of light exposure – and developers know that many people’s top criteria when finding a new property is lots of sun.
There you have it: those are the top three things to look for when evaluating a new development. Buying new can be very profitable, but you want to make sure you’re prepared to not get caught in these traps.
Want more advice just like this as you navigate the real estate market? You need a broker on your side! Reach out to the LJ Realties team today.