Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I have what I think is a somewhat unique question. My husband and I recently found our dream condo in a building that is almost complete but still under construction. Units all come with appliances including W/D, oven, fridge.
My husband is somewhat handy, and has a lot of experience with previous construction on our current apartment with an architect and contractor.
My question is, can we make an offer on the condo with the contingency that they don't have to "finish" the place? For example, we would rather use our contractor to do the tiling and things like that. It is really only details that are left on the condo. Would this be something the seller would be interested in doing? We would also prefer to buy some of our own appliances too. Does anyone ever say, I will give you an offer of $XXXk and you also don't have to finish x, y, an z? Is this crazy?
If you are obtaining financing, the place would need to be complete. If you're paying cash, I don't see why it wouldn't have to be finished.
For the most part, Lenders aren't going to lend on a partially completed place without a sizabe down payment and one of their constructions loans, rehab loans, or mortgage plus loans where you roll in the extra expense. In the end, it costs you more because your rate is higher for these different programs.
If you are obtaining financing, the place would need to be complete. If you're paying cash, I don't see why it wouldn't have to be finished.
For the most part, Lenders aren't going to lend on a partially completed place without a sizabe down payment and one of their constructions loans, rehab loans, or mortgage plus loans where you roll in the extra expense. In the end, it costs you more because your rate is higher for these different programs.
And "complete" means with all tiling/painting/appliances even though we would rip them out and change it after we buy anyway?
Lender will require CO on the condo. If things are missing (carpet, floor tile, etc).. Builder won't be able to obtain CO so no closing. As for credit for inomplete stuff, you will get very little.
Technically LOTS of places are sold in a condition that allows for "owner customization". Lenders generally want that sorts of things covered not as a "contingency" but as a "decorating allowance" which would cover "finishes and final fixture selection". It is not likely the builder is NOT going to want to had over "cash" but will allow a (sometimes SUBSTANTIAL) amount of leeway in how the "allowance" (essentially a credit on their books) will be spent.
The lender wants to have some pretty solid assurances that a QUALIFIED firm (like the builder themselves) is going to do the painting / tiling / appliance / fixture installation.
Odds are the builder can be talked into giving you the bulk of the "stuff" you want in ready-to-install condition (buckets of mastic, boxes of tiles, five gallon pails of paint) but they will NOT want to allow you all $10,000 as "materials", subtracting out a substantial portion for the "labor" they would pay to have this done...
Of course, given that tremendous numbers of condo builders are in horrible financial shape they might be open to anything and depending how / who is doing their financing they may see your willingness to accept the risks of ownership and cost overrun as sufficient motivation to do the deal as you want it.
Lenders really DO NOT need to only lend on fully finished projects -- the issue COULD be addressed by "construction financing" if this was a single family home, and then the construction loan would be switched to a regular mortgage. Condos are different. The "construction loan" is to the developer. Typically big lenders give a line of "mezzanine financing" to allow the condo developer to get to the "ready to sell" stage. The kind of firms that are still alive and capable of doing the mezzanine finanace are NOT looking to offload mortgages to the third party markets but are more likely the sorts of REIT firms that have no problem managing / renting out a substantial portion of the condo if it never gets to HUD owner occupied standards...
Again, the risk is that YOU, an owner occupier, basically will not be able to find a buyer if you want out...
Thanks everyone for the responses. Very helpful! It sounds like our best bet will be to see if there is an option to work with the building around some customization.
And most of the units are sold in the building. That is a good point as well.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
